rsity 


Univers 
California 

\vvine 


HC 


MEXICO    AND    ITS 
RECONSTRUCTION 


BY 


CHESTER  LLOYD  JONES 

SOMETIME  PROFESSOR  OF  POLITICAL  SCIENCE  IN  THE  UNIVERSITY 
OF  WISCONSIN,  COMMERCIAL  ATTACHE"  TO  THE  AMERICAN  EMBASSY 
TO  SPAIN,  ETC.  ;  AUTHOR  OF  "THE  CONSULAR  SERVICE  OF  THB 
UNITED  STATES,"  "STATUTE  LAW  MAKING  IN  THE  UNITED  STATES," 
"CARIBBEAN  INTERESTS  OF  THE  UNITED  STATES,"  ETC. 


D.  APPLETON  AND  COMPANY 

NEW  YORK   :   :  1921    :   :  LONDON 


COPYRIGHT,  IpZI,  BY 

D.  APPLETON  AND  COMPANY 


TO 

MY  WIFE 

CAROLINE  S.  LLOYD  JONES 


PREFACE 

The  developments  in  Mexico  during  the  period  that  has  come 
to  be  known  as  "the  old  regime"  were  of  peculiar  interest  to  the 
more  advanced  nations  of  Europe  and  America.  It  seemed  as 
if  here  was  a  republic  that  was  proving  that  self-government 
and  the  guarantee  of  public  order  were  not  incompatible  with  a 
geographical  position  in  the  sub-tropics  and  a  population  pre- 
dominantly of  Indian  blood. 

What  has  happened  since  the  fall  of  Diaz  would  have  been 
more  closely  followed  by  the  western  world  had  not  the  World 
War  absorbed  its  energy  and  attention.  Mexico  became  for  the 
moment  a  factor  that  was  considered  less  for  itself  and  more  in 
its  possible  relation  to  the  general  conflict.  With  the  end  of  the 
war  events  in  Mexico  assume  greater  importance.  The  revo- 
lution has  proved  that  the  government  was  not  yet  on  a  founda- 
tion so  firm  as  was  supposed.  The  task  of  the  reformers  is  to 
find  means  to  make  it  firm.  The  brilliant  economic  show  of  the 
Diaz  regime  must  be  supplemented  by  a  transformation  in  social 
and  political  conditions.  Efforts  to  bring  the  new  day  will  be 
closely  watched  by  those  who  have  capital  invested  in  Mexico 
itself,  by  those  with  economic  interests  in  other  undeveloped 
regions,  by  students  of  international  affairs,  especially  in  Eu- 
rope and  America,  and  by  students  of  government  the  world 
around. 

At  the  beginning  of  the  century  the  less  informed  had  come 
to  look  upon  the  problems  that  might  arise  in  Mexico  as  simi- 
lar to  those  which  might  arise  in  the  United  States,  in  Great 
Britain,  or  in  France.  Many  of  those  who  knew  Mexico  best 
held  the  same  belief — the  economic  foundation  of  the  country 
was  secure,  only  time  was  needed  for  the  elimination  of  the  back- 

vii 


Vlll 


PREFACE 


ward  conditions  still  characteristic  of  the  national  life.  Such 
a  judgment  was  mistaken  and  unfair  to  Mexico.  The  republic 
was  not  yet  to  be  measured  by  the  standards  of  Western  Europe. 

Nor  is  it  fair  to  expect  that  the  internal  problems  that  con- 
front the  governments  that  follow  the  revolution  can  be  solved 
in  a  period  of  a  few  years  no  matter  how  favorable  the  aus- 
pices under  which  the  reforms  are  undertaken.  It  is  too  easy 
to  be  encouraged  by  a  temporary  or  local  improvement  in  con- 
ditions. There  will  be  many  surprising  advances  and  disap- 
pointing backslidings  before  Mexico  is  surely  on  the  road  to 
becoming  a  modern  state. 

It  is  because  he  overlooks  these  facts  that  the  judgment  of 
the  average  man  in  Europe  and  the  United  States  upon  con- 
ditions in  Mexico  and  the  policy  that  should  be  adopted  toward 
the  republic  is  of  such  little  weight.  He  measures  Mexico  by 
the  standards  to  which  he  himself  is  accustomed,  and  what  in- 
formation he  possesses  is  usually  derived  from  the  accounts  of 
current  events  in  periodical  publications.  As  a  matter  of  fact, 
what  happens  to-day  or  to-morrow  in  Mexico,  whether  this 
leader  or  that  is  in  control,  defeated,  exiled,  or  killed,  is  prob- 
ably of  little  importance.  Such  items  are  worthy  of  study  only 
as  they  indicate  a  general  tendency  of  development  in  domestic 
affairs  or  possible  complications  with  foreign  powers.  Unfor- 
tunately it  must  be  admitted  that  current  events  for  the  past 
decade  in  Mexico  have  too  often  been  so  confused  that  no  con- 
structive development  could  be  discerned. 

To  understand  Mexico  and  the  Mexican  problem  it  is  neces- 
sary to  study  more  than  current  political  happenings  and  trade 
exchange.  It  is  necessary  to  know,  among  other  elements,  the 
racial  endowment  of  the  people,  the  character  of  the  govern- 
ments under  which  they  have  lived,  the  obligations  the  govern- 
ment has  assumed  toward  other  nations  and  their  citizens,  the 
social  and  economic  organization  of  Mexican  society,  the  char- 
acter of  internal  and  foreign  commerce,  the  development  of 
transportation  facilities,  the  position  of  those  of  other  than 
Mexican  nationality  who  have  made  the  republic  their  home, 


PREFACE  ix 

and  tKe  relations  of  Mexico  with  other  states,  particularly  its 
neighbors. 

No  state  in  our  day  lives  unto  itself  alone.  It  must  be  in 
touch  with  the  outside  world  and  especially  with  the  nations 
upon  which  it  borders.  It  is  for  this  reason  that  the  relations 
of  the  United  States  to  Mexico  have  become  so  important  and 
are  sure  in  the  future  to  be  of  even  greater  moment.  What 
affects  one  cannot  fail  to  affect  the  other.  Already  the  more 
obvious  of  international  relationships  between  the  two  are  em- 
phasized in  an  unusual  degree.  American  investments  in  Mex- 
ico far  exceed  those  of  any  other  foreign  country.  The  for- 
eign trade  of  Mexico  with  the  United  States  is  more  important 
for  Mexico  than  that  with  all  the  rest  of  the  world  combined,  a 
condition  which  the  developments  during  the  World  War  have 
accentuated.  The  foreign  relations  of  the  two  countries  have 
an  intimate  connection — neither  can  feel  itself  safe  without  the 
friendship  of  the  other.  Failure  to  realize  their  political  unity 
of  interest  might  endanger  the  foreign  policy  which  the  United 
States  has  for  a  century  defended,  to  assure  the  free  develop- 
ment of  all  the  American  republics. 

No  single  volume  can  give  a  detailed  picture  of  such  complex 
elements  as  those  cited  in  the  preceding  paragraphs.  It  may, 
however,  help  to  indicate  the  various  factors  that  must  be  taken 
into  consideration  by  the  individual  and  by  the  state  of  which 
he  forms  a  part  in  arriving  at  a  judgment  of  what  may  fairly 
be  expected  of  a  government  working  under  such  conditions  as 
will  confront  Mexico  during  its  trying  period  of  reconstruction. 
It  is  hoped  that  this  book  may  assist  its  readers  in  forming 
such  a  judgment  and  may  stimulate  them  to  further  study  of 
the  problems  which  it  outlines.  How  important  an  intelligent 
understanding  of  these  problems  is  for  both  Mexico  and  the 
United  States  is  realized  by  only  a  small  portion  of  the  peoples 
of  the  two  republics. 

The  materials  used  in  the  preparation  of  this  book  have  been 
largely  the  official  publications  of  Mexico  and  of  the  United 
States.  These  have  been  supplemented  by  the  studies  made  by 


x  PREFACE 

students  of  the  republic  both  Mexican  and  foreign.  From 
neither  of  these  sources  alone  nor  by  both  together  is  a  satis- 
factory picture  of  Mexican  conditions  derivable,  and  at  many 
points  the  testimony  of  periodicals  and  of  residents  of  the  re- 
public must  be  accepted  as  the  best  information  available.  This 
is  true  especially  for  recent  years,  but  in  a  measure  also  in  dis- 
cussing the  earlier  periods,  for  the  formal  history  of  Mexico, 
economic,  political  and  social,  is  to  an  unusual  degree  unwritten. 
My  thanks  are  due  to  the  authorities  of  the  University  of 
California  and  to  those  of  the  Library  of  Congress  at  Wash- 
ington for  facilities  placed  at  my  disposal.  I  am  indebted  also 
to  friends  too  numerous  to  mention  for  suggestions  and  criti- 
cism, to  Dr.  Norman  Bridge,  who  has  read  the  manuscript,  and 
to  Mr.  Edward  L.  Doheny,  whose  establishment  of  the  Doheny 
Foundation  made  available  valuable  source  materials  relating  to 
Mexican-American  relations. 

CHESTER  LLOYD  JONES 


CONTENTS 


FAGX 

PREFACE vii 

I.    WHY  MEXICO  Is  A  PROBLEM 1 

II.     THE  POPULATION  OF  MEXICO 10 

III.  THE  GOVERNMENT  OF  MEXICO:  EXECUTIVE  GOVERNMENT       .  28 

IV.  THE  GOVERNMENT  OF  MEXICO:  ELECTIONS 42 

V.    THE  GOVERNMENT  OF  MEXICO:  THE  STATE  AND  LOCAL  GOV- 
ERNMENTS          58 

VI.     MEXICAN  FINANCE:  FOREIGN  LOANS  AND  FOREIGN   CLAIMS    .  66 

VII.     MEXICAN  FINANCE:  CURRENCY  AND  THE   BANKS     ...  83 

VIII.     MEXICAN  FINANCE:  PUBLIC  INCOME  AND  EXPENDITURE  .       .  94 

IX.    THE  MEXICAN  LABORER 104 

X.     THE  MEXICAN  LABORER:  His  CONTRACT 114 

XI.     THE  MEXICAN  LABORER:  His  WAGES  AND  DEMANDS  .       .       .  135 

XII.     THE  MEXICAN  LABORER:  His  OPPORTUNITIES       ....  148 

XIII.  TRANSPORTATION           161 

XIV.  INDUSTRY  AND  INTERNAL  COMMERCE 175 

XV.     THE  FOREIGN  COMMERCE  OF  MEXICO:  BEFORE  DIAZ  .       .       .  187 

XVI.     THE  FOREIGN  COMMERCE  OF  MEXICO:  THE  DIAZ  REGIME  AND 

AFTER 199 

XVII.     COLONIZATION 220 

XVIII.     THE  FOREIGNER  IN  MEXICO:  His  PROPERTY         ....  239 

XIX.     THE  FOREIGNER  IN  MEXICO:  His  LEGAL  POSITION     .       .       .  253 

XX.     THE  TROUBLESOME  BORDER 271 

XXI.    MEXICAN-AMERICAN  RELATIONS 297 

BIBLIOGRAPHY ••....  311 

INDEX .      .       ....  821 

xi 


MEXICO    AND    ITS 
RECONSTRUCTION 

CHAPTER  I 

WHY  MEXICO  IS  A  PROBLEM 

A  GENERATION  ago  few  Americans  recognized  that 
Mexico  was  a  problem  and  still  fewer  that  it  was  one 
that  deeply  concerned  the  United  States.  For  more 
than  a  half  century  it  had  been  a  country  in  which  civil 
dissension  was  seldom  absent.  It  was  a  land  almost  un- 
known, one  in  which  the  stagnation  of  the  Spanish  colo- 
nial system  of  government  had  been  succeeded  by  the 
stagnation  which  comes  from  lack  of  enterprise,  lack 
of  education,  and  lack  of  intelligent  and  efficient  gov- 
ernment. The  dictatorship  which  had  been  set  up  re- 
cently had  shown  signs  of  strength,  it  is  true,  greater 
than  its  short-lived  predecessors,  and  railway  building 
had  made  a  promising  beginning  but  the  outside  world 
still  looked  upon  Mexico  as  a  problem  to  itself  and  a 
matter  of  comparative  indifference  to  others. 

But  the  past  generation  has  seen  an  internationaliz- 
ing of  the  affairs  of  the  world  that  has  made  it  impos- 
sible for  any  state  to  remain  isolated  from  the  affairs 
of  its  neighbors.  Strictly  speaking,  of  course,  national 
interests  are  not  bounded  by  national  frontiers  and  they 


never  have  been.  They  are  less  so  now  than  ever  before. 
As  communication  and  commercial  interchanges  develop 
international  contacts  become  more  important.  As  emi- 
gration from  one  country  to  another  increases  the  obliga- 
tions of  countries  to  protect  the  rights  of  resident  for- 
eigners increase.  Independence  is  replaced  by  an  inter- 
locking of  interests  that  demands  a  recognition  of  the 
fact  that  no  state  can  longer  be  independent  as  it  was 
in  times  past. 

The  emphasis  of  duties  of  this  sort  does  not  greatly 
increase  the  burdens  of  the  stronger  powers  nor  those 
of  the  lesser  states  that  have  created  orderly  govern- 
ments capable  of  protecting  life  and  property.  Weaker 
nations  are  able  to  give  a  less  effective  guarantee  to  for- 
eigners and  to  their  own  citizens.  As  a  result,  in  spite 
of  the  theory  of  equality  of  states,  in  practice  the  more 
advanced  states  exercise  a  constant  pressure  upon  the 
weaker  to  assure  that  they  exert  themselves  to  guaran- 
tee safety  for  life  and  property.  The  pressure  may  be 
veiled  but  it  is  none  the  less  real.  If  the  responsibility 
is  not  assumed,  there  is  always  the  possibility  of  recourse 
to  force.  Many  examples  could  be  cited.  The  demands 
made  upon  Venezuela  in  the  opening  years  of  the  cen- 
tury and  the  claims  for  indemnities  arising  from  the 
Boxer  rebellion  in  China  are  illustrations  of  the  ways  in 
which  reparations  may  be  sought.  That  there  is  pos- 
sibility of  abuse  in  such  circumstances  is  beyond  dispute, 
but  the  alternative — to  allow  the  weaker  state  a  free 
hand  in  the  persecution  of  foreigners — would  be  a  pol- 
icy even  less  endurable.  Such  a  policy  is  intolerable  un- 
der modern  conditions  when  both  population  and  capital 


WHY  MEXICO  IS  A  PROBLEM  3 

pass  frontiers  in  normal  times  with  insignificant  difficul- 
ties and  do  so  in  response  to  invitation  and  even  solicita- 
tion by  foreign  countries  and  their  citizens. 

All  around  the  world  the  problems  of  the  weak  states 
promise  to  hold  the  front  of  international  attention  dur- 
ing the  coming  decade.  In  fact  the  elimination  of  "un- 
redeemed lands"  and  the  efforts  to  exploit  resources  now 
undeveloped  will  emphasize  the  international  importance 
of  unprotected  interests  in  disordered  states.  Though 
it  does  not  greatly  increase  their  domestic  problems  the 
passing  of  the  day  when  each  state  was  a  law  unto  itself 
creates  new  international  responsibilities  for  the  stronger 
nations  toward  the  weaker. 

The  regions  of  the  world  in  which  the  problem  of  the 
protection  of  foreign  interests  promises  to  be  most  im- 
portant are  three.  In  eastern  Europe  and  the  Near 
East  it  is  evident  that  the  settlements  following  the 
World  War  cannot  set  up  states  that  will  at  once  be 
able  to  discharge  easily  all  the  responsibilities  toward 
their  neighbors  and  toward  resident  foreigners  that  the 
great  powers  will  wish  to  have  assumed.  The  Far  East 
will  have  important  problems  of  adjustment. 

Finally  there  is  the  unstable  area  in  America — ex- 
tending from  the  Rio  Grande  to  northern  South  Amer- 
ica. Africa  will  probably  be  less  important  in  matters 
of  this  sort  because,  but  for  Abyssinia  and  Liberia,  it 
has  ceased  to  be  a  region  in  which  there  are  so-called 
sovereign  states  and  its  other  native  peoples  under 
European  influence,  except  in  Egypt  and  Morocco,  have 
shown  no  nationalistic  aspirations  or  aptitudes. 

In  the  American  area  control  by  the  most  powerful 


4      MEXICO  AND  ITS  RECONSTRUCTION 

American  state  over  its  weaker  neighbors  has  been  grow- 
ing steadily  for  two  decades.  The  responsibilities  as- 
sumed in  Cuba  and  Panama  have  been  followed  by 
others,  which  now  include  practical  protectorates  over 
all  of  the  West  Indian  republics  and  a  complex  of  re- 
sponsibilities in  Central  America. 

Although  this  extension  of  influence  has  been  steady 
it  has  not  been  the  result  of  any  well  thought  out  plan, 
indeed,  'to  a  very  large  degree,  it  has  been  a  product  of 
circumstances  rather  than  of  policy.  It  is  not  an  in- 
crease of  control  which  the  government  or  people  of  the 
United  States  has  actively  desired  and  it  is  not  one  which 
either  wishes  to  see  further  extended.  Nevertheless  it 
can  but  be  evident  that  the  circumstances  that  are  de- 
veloping in  the  world  will  make  the  policy  to  be  followed 
toward  the  countries  encircling  the  Caribbean  one  of  the 
leading  factors  in  American  foreign  policy  in  the  imme- 
diate future. 

One  of  the  most  important  problems  that  American 
statesmen  will  have  to  face  and  one  of  the  most  difficult 
of  the  adjustments  that  must  be  made  during  the  period 
of  reconstruction  following  the  World  War  involves 
the  relations  of  the  United  States  and  Mexico.  The 
foreign  policy  adopted  toward  this,  the  most  important 
of  the  Latin  republics  of  North  America,  may  be  the 
outstanding  factor  in  American  international  policy  in 
the  next  decade.  The  solution  arrived  at  will  be  impor- 
tant for  the  world  at  large,  and  especially  for  the  United 
States,  for  a  large  number  of  reasons. 

T.  From  the  broadest  international  viewpoint  it  will 
be  significant  because  it  will  show  what  standard  is 


WHY  MEXICO  IS  A  PROBLEM  5 

found  practical  by  a  power  that  has  prominently  de- 
clared its  altruistic  motives  in  its  actions  toward  weaker 
nations.  Though  the  United  States  has  a  better  per- 
spective in  such  matters  now  than  at  the  beginning  of 
the  century,  it  is  still  less  experienced  in  dealing  with 
weaker  peoples  than  Great  Britain  and  France,  the  chief 
European  powers  that  in  the  near  future  will  be  called 
upon  to  deal  with  similar  situations.  As  a  consequence 
the  United  States  approaches  the  Mexican  problem  with 
perhaps  greater  possibility  of  error  but  less  bound  by 
precedent. 

2.  Contrasts  in  civilization  are  present  in  high  degree 
in  the  Mexican  problem.    Anglo-Saxon  and  Latin  cus- 
toms and  languages  meet.    Within  Mexico  itself  there 
are  many  contrasts  and  conflicts  arising  out  of  the  na- 
tive elements  of  the  population  and  the  lack  of  com- 
munication between  the  various  districts  of  the  country. 
From  a  cultural  standpoint  these  have  kept  the  republic, 
to  a  great  degree,  a  collection  of  units  rather  than  a 
single  state  and  will  make  a  satisfactory  solution  of 
Mexican  relations  difficult. 

3.  The  great  natural  wealth  of  Mexico  makes  it  a 
region  in  which  the  adjustment  of  its  political  and  eco- 
nomic relations  with  the  rest  of  the  world  is  of  great  im- 
portance. 

4.  What  may  be  called  the  resident  international  in- 
terests within  Mexico  emphasize  the  fact  that  arrange- 
ments concerning  its  government  are  not  merely  of  local 
concern.    During  the  Diaz  period  of  orderly  govern- 
ment an  inflow  of  foreign  capital  occurred  that  makes 
what  happens  to  the  investments  in  the  country  a  mat- 


6      MEXICO  AND  ITS  RECONSTRUCTION 

ter  of  unusual  international  interest.  Of  the  invest- 
ments made  those  representing  American  capital  are  by 
far  the  most  important. 

5.  Its  international  trade  exchange  makes  a  country 
of  importance  in  international  affairs.    The  economic  de- 
velopment of  Mexico  since  the  '80s  of  the  past  century 
has  made  it  one  of  the  most  important  of  the  American 
republics  in  foreign  commerce.    In  both  the  imports  and 
exports  of  Mexico  the  United  States  plays  a  part  far 
more  important  than  any  other  power. 

6.  Mexican  affairs  are  of  special  interest  to  the 
United  States,  furthermore,  because  Mexico  is  the  near- 
est of  foreign  countries.    The  two  republics  are  neigh- 
bors with  adjoining  properties  and  what  affects  one 
must  have  an  effect  upon  the  other. 

7.  The  developments  that  occur  in  Mexico  will  have 
a  wider  influence  on  American  foreign  policy  than  ap- 
pears at  first  sight,  for  Mexican  relations  are  in  a  pecu- 
liar way  a  thermometer  for  Pan-American  relations. 
Whether  the  assumption  is  justified  or  not,  any  measure 
adopted  toward  Mexico  is  apt  to  be  taken  by  other  Latin 
American  states  as  a  measure  of  what  may  be  expected 
for  themselves,  however  different  the  conditions  to  be 
met  in  the  two  cases  may  be.    This  is  unfortunate  but 
true.     Obviously  that  which  may  be  demanded  from 
Haiti  for  the  protection  of  the  rights  of  the  United 
States  would  be  unnecessary  in  a  country  of  the  orderly 
character  of  Argentina  or  Chile.   Nevertheless  the  Latin 
American  countries  consider  themselves  a  group  with 
common  interests  and  a  step  that  affects  one  is  looked 
upon  as  indicating  a  policy  toward  the  rest.    There  can 


WHY  MEXICO  IS  A  PROBLEM  7 

be  no  doubt  that  whatever  is  done  by  the  United  States 
in  Mexico  will  have  a  very  clear  repercussion  on  the 
Pan- Americanism  of  which  the  United  States  has  been 
an  exponent  and  defender.  What  the  policy  has  meant 
has  never  been  definitely  stated.  The  idea  greatly  needs 
clarifying.  Pan-Americanism  of  the  sort  that  has  been 
popular  in  some  quarters  in  the  past  will  become  more 
and  more  difficult  to  maintain.  The  actual  develop- 
ments in  world  affairs  promise  little  for  any  policy  that 
can  be  interpreted  as  inconsistent  with  a  recognition 
that  "independence"  carries  great  and  increasing  re- 
sponsibilities toward  foreign  states  and  individuals. 

8.  The  relations  of  the  United  States  and  Mexico 
have  an  interest  not  limited  to  America.     In  dealing 
with  Mexico  the  northern  republic  will  have  a  complex 
problem  involving  contrasting  civilizations  and  the  meet- 
ing of  a  people  with  wide  experience  in  democratic  in- 
stitutions with  one  almost  unexperienced  in  popular  gov- 
ernment, though  nominally  devoted  to  its  ideals.     Its 
policy  will  be  influenced  by  the  measures  taken  to  de- 
velop the  latent  natural  resources  and  the  already  im- 
portant foreign  trade  and  investments.    Mexico  is  the 
greatest  and  wealthiest  of  the  weak  states  of  predomi- 
nantly aboriginal  population  that  lie  near  to  a  great 
Western  power.    Obviously  the  political  and  economic 
adjustments  that  are  found  possible  under  such  circum- 
stances cannot  fail  to  be  of  interest  to  all  the  world  and 
especially  to  those  powers  which  have  close  contact  with 
the  less  developed  independent  nations. 

9.  Finally,  the  Mexican  problem  is  one  that  has  un- 
usual  interest   for  the  world   and   especially   for  the 


8      MEXICO  AND  ITS  RECONSTRUCTION 

United  States  because  it  seems  sure  to  have  a  rapid  de- 
velopment. Had  not  the  World  War  absorbed  the  at- 
tention of  the  world,  the  conditions  that  have  developed 
south  of  the  Rio  Grande  would  almost  surely  have  been 
followed  before  now  by  international  action.  The  in- 
terests of  the  United  States  would  have  prompted  it 
but,  even  if  the  desire  not  to  offend  the  susceptibilities 
of  the  other  Latin  American  states  had  delayed  action, 
and  even  if  those  who  believe  that  the  government  owes 
no  responsibility  to  its  citizens  who  invest  their  lives 
and  property  in  foreign  lands  had  been  able  to  hold  back 
the  hand  of  the  administration,  some  forward  step  would 
almost  certainly  have  been  found  necessary. 

Even  if  the  United  States  had  been  willing  to  suffer 
and  wait,  it  seems  little  likely  that  other  powers  would 
have  been  content  to  do  so.  That  they  would  not  have, 
been  willing  is  indicated  by  the  action  taken  by  European 
powers  toward  Haiti  in  the  days  immediately  preceding 
the  World  War.  The  larger  interests  held  by  the  citi- 
zens of  European  governments  in  Mexico  would  have 
prompted  them  to  take  measures  io  protect  their  in- 
terests there  if  the  United  States  would  not.  A  threat 
to  do  so  is  the  easiest  way  to  force  the  American  hand. 

As  in  civil  society,  so  in  international  affairs,  the 
shortcomings  of  the  weak  are  the  problems  of  the  strong. 
As  the  period  of  reconstruction  progresses,  Mexican  af- 
fairs will  again  assume  importance  not  only  in  American 
international  policy  but  in  that  of  all  the  great  powers. 
There  must  be  created  within  the  republic  a  government 
that  can  establish  order,  that  will  respect  individual 
rights,  put  the  great  resources  of  the  nation  again  at  the 


WHY  MEXICO  IS  A  PROBLEM          9 

service  of  those  living  within  its  borders,  and  enable  it 
to  contribute  its  due  share  to  the  maintenance  of  the 
family  of  nations.  To  make  that  possible  all  true 
friends  of  Mexico  and  all  true  friends  of  the  United 
States  must  strive. 


CHAPTER  II 

THE  POPULATION  OF  MEXICO; 

ONE  of  the  most  easily  understood  errors  into  which 
we  fall  is  to  suppose  that  political  boundaries  coincide 
with  those  of  race  and  culture.  Before  the  World  War 
how  many  could  have  named  the  lesser  peoples  who,  in 
the  course  of  the  conflict,  raised  their  claims  to  the  right 
of  self-determination  and  political  independence?  Few 
indeed. 

When  we  think  of  Mexico,  we  fall  into  the  same  error. 
There  have  been  no  important  population  movements 
within  the  territory  of  the  greatest  of  the  Latin  republics 
in  North  America  since  the  region  has  been  known  to 
Western  civilization.  There  has  been  no  immigration 
from  abroad  that  has  brought  in  an  element  that  puts 
forth  a  claim  for  a  government  independent  of  the  rest 
of  the  republic.  There  have  been  no  racial  or  social 
barriers  which  had  to  be  broken  down  to  allow  Mexico 
to  become  a  unit  in  fact  as  well  as  in  name.  Neverthe- 
less there  is  to-day  no  Mexican  people,  though  we  speak 
of  one.  There  never  has  been  one.  The  feeling  of  na- 
tionality is  here  one  of  those  artificially  created  phenom- 
ena, the  strength  of  which  so  often  proves  out  of  all  pro- 
portion to  that  of  the  base  upon  which  they  rest. 

The  description  of  the  ideal  state  conceived  by  some 
theorists,  "an  ethnic  unity  living  within  a  geographic 
unity"  is  fully  applicable  to  but  few,  if  any,  nations.  It 

is  far  from  describing  the  population  of  Mexico.    The 

10 


THE  POPULATION  OF  MEXICO        11 

Mayas,  the  Zapotecs,  the  Yaquis,  these  are  all  Mexican 
citizens  but  the  political  bond  is  almost  the  only  one  that 
unites  them.  Historically,  culturally,  economically  they 
have  little  in  common  that  indicates  that  they  should 
owe  a  common  allegiance. 

Above  the  native  stocks  are  the  mixed  bloods  who 
have  at  least  the  common  bond  of  their  racial  connection 
and  above  these  are  those  of  European  lineage,  descend- 
ants of  the  immigrants  of  colonial  times  or  of  later  ar- 
rivals. These  two  latter  classes,  by  their  adaptability 
and  by  their  more  intimate  contact  with  the  civilization 
of  the  outside  world,  are  the  cement  of  the  Mexican 
peoples. 

It  is  hard  to  secure  information  that  will  give  a  satis- 
factory picture  of  Mexican  life  because  neither  the  gov- 
ernment nor  any  private  agency  has  ever  attempted  a 
thoroughgoing  survey  of  economic  and  social  condi- 
tions.1 There  has  never  been  an  accurate  census  of  the 
peoples  of  Mexico  that  established  even  their  number 
much  less  one  that  gives  a  picture  of  their  economic  and 
social  status  and  organization.  For  the  earlier  years 
only  the  roughest  estimates  are  available  and  for  the 
later  ones  enumerations  by  the  government  must  be  re- 
lied upon,  which,  while  nominally  complete,  have  not 
been  based  upon  an  actual  count  in  many  parts  of  the 
republic. 

The  records  of  colonial  times  are  more  complete,  in 
fact,  than  those  of  the  first  fifty  years  of  the  republic 
because  for  the  estimates  referring  to  that  time  the  par- 

1  An  excellent  recent  study  in  this  field  is  Wallace  Thompson, 
The  People  of  Mexico,  New  York,  1921. 


12    MEXICO  AND  ITS  RECONSTRUCTION 

ish  registers  of  all  who  were  born  or  who  died  in  the  re- 
public were  available.  The  first  general  census  was  not 
taken  until  the  close  of  the  nineteenth  century  but  even 
after  that  event  an  authoritative  Mexican  work  declares 
that  "nothing  can  be  asserted  honestly  about  the  growth 
of  population  of  Mexico  considering  the  want  of  facts 
and  the  defectiveness  of  the  few  we  possess." 2  In  spite 
of  this  stricture  the  various  estimates  that  have  been 
made  from  time  to  time  are  presented  to  indicate,  if  not 
the  exact  conditions,  the  opinion  of  those  best  informed 
concerning  them. 

A  report  to  the  king  in  1793  represented  the  popula- 
tion as  totaling  4,483,529.  Humboldt  estimated  it  to 
be  5,783,750  in  1803.  In  1823  it  was  thought  to  be  about 
6,998,337.8  The  census  of  1855  put  the  population  at 
8,069,046.*  In  1877-8  it  was  announced  by  the  govern- 
ment as  10,577,279,  an  average  of  4.89  per  square  kilo- 
meter.* The  central  states  such  as  Aguascalientes  and 

2  Justus  Sierra,  editor,  Mexico,  Its  Social  Evolution,  vol.  i,  p. 
19.  The  first  general  census  was  taken  in  October,  1895. 

*The  estimates  for  1793,  1803,  and  1823  are  quoted  from  Joel 
Eoberts  Poinsett,  Notes  on  Mexico,  accompanied  by  an  historical 
sketch  of  the  revolution,  Philadelphia,  1824,  p.  109. 

*  fstadistica  de  la  republica  mexlcana.     Estado  que  guardan  la 
agricultura,  industria,  mineria,   y   comercio;  Anexo  num.   3  a  la 
memoria  de  Hacienda  'del  ano  economico  de  1877  a  1878,  Mexico, 
1880,  p.  420.     Carlos  Butterfield,  in   United  States  and  Mexico, 
p.  58,  published  in  1861,  quoting  the  "latest  and  best  authenticated 
returns,"  gave  tEe  population  as  8,283,088.    Antonio  Garcia  Cubas 
and  George  F.  Henderson  in  The  Republic  of  Mexico,  in  1876, 
estimated  the  population  at  9,495,157  souls. 

*  Estadistica  de  la  republica  mexicana.     Estado  que  guardan  la 
agricultura,   industria,  mineria,  y  comercio;  Anexo   num.   3  a  la 


THE  POPULATION  OF  MEXICO        13 

Puebla  had  between  twenty  and  thirty  people  to  the 
square  kilometer,  the  south  was  less  populated.  Chiapas 
averaged  about  nine  and  Yucatan  three.  The  north  was 
sparsely  populated  and  large  districts  were  practically 
unoccupied.  Sonora  had  only  about  1.5  to  the  square 
kilometer,  Coahuila  1.4,  Chihuahua  1.2,  and  the  arid 
territory  of  Lower  California  one  person  to  six  square 
kilometers.  In  1890  the  total  was  estimated  at  11,- 
632,924,8  and  the  census  of  1910  declared  that  there  were 
15,160,369  souls  in  the  republic.7 

It  appears  that  through  all  the  history  of  the  republic 
the  population  has  had  a  slow  but  fairly  steady  increase. 
It  has  never  been  sufficient  to  develop  the  resources  of 
the  country,  an  inability  accentuated  by  lack  of  capital 
and  lack  of  technical  education.  The  country  may  still 
be  divided  into  three  zones  as  to  density  of  population 
as  at  the  beginning  of  the  Diaz  regime.  First  there  is 
the  group  of  border  states  next  to  the  United  States,  a 

memoria  de  hacienda  del  ano  economico  de  1877  a  1878t  Mexico, 
1880,  p.  420. 

0  The  following  schedule  of  estimates  for  the  first  part  of  the 
Diaz  regime  is  quoted  in  Luis  Pombo,  Mexico:  1876-1892,  Mexico, 
1893,  p.  1: 

1874 —  9,343,470   (Garcia  Cubas) 

1878 —  9,384,193   (Secretaria  de  Gobernacion) 

1880 — 10,001,884   (Emiliano  Busto) 

1886—10,791,685   (Bodo  von  Glumer) 

1888—11,490,830  (Direccion  General  de  Estadfstica) 

1889—11,395,712   (Garcia  Cubas) 

1890—11,632,924   (Antonio  Penafiel) 

For  further  discussion  of  this  subject  see  Wallace  Thompson, 
op.  cit.f  pp.  56-85. 

7  Boletin  de  la  direccion  general  de  estadistica,  5,  Mexico, 
p.  18. 


14    MEXICO  AND  ITS  RECONSTRUCTION 


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THE  POPULATION  OF  MEXICO        15 

large  portion  of  the  area  of  which  is  taken  up  by  moun- 
tains and  by  great  plains  of  scant  rainfall.  This  area 
has  always  been  sparsely  populated  and,  it  seems,  must 
continue  to  be  so.  The  percentage  of  white  blood  among 
its  people  is  higher  than  in  other  regions  and  they  have 
contributed  beyond  what  would  be  indicated  by  their 
numbers  to  the  initiative  for  development  that  has  been 
shown  in  Mexico. 

The  Gulf  and  Pacific  coast  states  form  another  group. 
The  former  are  on  the  average  less  thickly  populated 
than  the  latter,  though  Lower  California  is  an  excep- 
tion, great  areas  being  still  without  population.  Jalisco, 
Michoacan,  and  Oaxaca  have  been  the  most  thickly 
populated  and  important  states  of  the  Pacific  group. 

Now  as  always,  however,  the  greater  part  of  the  Mex- 
ican population  is  found  in  the  states  of  the  central 
plateau,  where  the  civilization  of  the  country  also  finds 
its  best  development. 

If  it  is  difficult  to  ascertain  the  population  of  Mex- 
ico, it  is  even  more  difficult  to  find  out  the  proportion  in 
which  the  various  racial  elements  are  represented.  The 
report  to  the  king  in  1793,  above  referred  to,  gave  the 
total  number  of  Europeans  as  7,904,  white  Creoles  677,- 
458,  castes  1,478,426,  and  Indians  2,319,741.  This 
would  have  made  the  percentages  .2;  15.;  33.;  and  52., 
respectively.8  An  approximate  picture  of  the  racial  de- 
velopments since  that  time  may  be  secured  from  the 
estimates,  official  and  unofficial,  made  at  various  periods 
as  shown  in  the  table  opposite, 

8  Compiled  from  the  figures  in  Poinsett,  op.  cit. 


16    MEXICO  AND  ITS  RECONSTRUCTION 

The  proportions  of  these  racial  classes  vary  greatly 
in  different  parts  of  the  country.  In  the  north  the  In- 
dian tribes  as  such  have  practically  disappeared.  The 
Tarahumaras  and  Tepehuanas  and  especially  the 
Yaquis,  living  in  regions  until  recently  little  valued  by 
the  whites,  by  their  resistance  to  further  encroachments 
on  their  rights  have  had  more  attention  drawn  to  them 
than  their  number  warrants.  In  the  south  the  indigenes 
are  in  general  a  larger  part  of  the  population.  Guer- 
rero and  Michoacan  inhabited  by  the  Tarascas ;  Oaxaca 
with  its  Miztecs  in  the  west  and  Zapotecs  in  the  east; 
and  Yucatan,  Campeche,  and  Chiapas,  in  which  the 
population  is  very  largely  of  the  Maya  group,  are  the 
most  distinctively  Indian  areas. 

The  number  of  the  pure  Indians  has  decreased  rela- 
tively with  the  gradual  spread  of  intermarriage  with 
whites  and  mixed  bloods  and  doubtless  will  continue  to 
do  so.  In  a  large  part  of  the  republic,  however,  they 
are  the  most  important  part  of  the  population  numer- 
ically and  they  are  the  chief  source  of  the  labor  sup- 

ply-8 

The  descriptions  of  the  Indians  of  Mexico  at  various 
periods  in  the  history  of  the  republic  are  almost  inter- 
changeable. In  general  they  have  kept,  with  but  slight 
modification,  the  customs  they  had  four  centuries  ago 
when  America  was  discovered.  In  many  parts  of  the 
country  they  continue  to  live  in  almost  complete  isola- 
tion, sufficient  unto  themselves.  Even  now  they  con- 

9  See  a  discussion  of  these  points  in  Erich  Gunther,  Handbuch 
von  Mexico,  Leipzig,  1912,  p.  65  el  seq.,  and  Wallace  Thompson, 
Op.  cit.,  pp.  3-34  and  56-85. 


THE  POPULATION  OF  MEXICO        17 

sume  little  from  abroad  and  their  demands  are  so  few 
that  they  produce  little  that  enters  into  general  trade 
within  the  country  itself.  Nor  do  they  contribute  to 
export  trade  in  proportion  to  their  numbers.  They  are 
not  now  and  they  never  have  been  important  in  the 
creation  of  public  wealth.10 

At  the  other  end  of  the  racial  scale  is  the  white  popu- 
lation which,  since  the  time  of  the  Spanish  dominion, 
has  shown  a  preference  for  life  in  the  cities,  especially 
the  capital.  In  Mexico,  however,  there  does  not  exist 
any  sharp  social  cleavage  such  as  separates  those  of  color 
from  the  Caucasian  in  the  United  States.  This  has 
always  been  the  case.  The  Spanish  colonist  did  not  as 
a  rule  bring  with  him  a  wife  or  wife  and  children  but 
took  unto  himself  a  native  wife  and  from  such  unions 
have  sprung  the  mixed  bloods  who  form  the  increasing 
percentage  of  the  population  of  Mexico.  There  are 
among  the  upper  class  Mexicans  many  who  are  proud 
of  pure  Castilian  descent  and  who  evidence  a  desire  to 
pass  it  on  to  their  children,  but  this  feeling  appears  to  be 
one  resting  on  tradition  and  family  pride  rather  than  on 
racial  feeling.  There  is  little  if  any  disadvantage  under 
which  a  person  of  mixed  blood  works  in  business  life  or 
in  the  seeking  of  public  office." 

The  mestizo  population,  which  has  arisen  between  the 

10  Memorla  de  hacienda  y  credito  publico  .  .  .  1  de  Julio  de  1891 
a  30  de  Junio  1892,  Mexico,  1892,  p.  21  et  seq.    For  a  very  similar 
description  of  the  Indian  population  in  1824  see  Poinsett,  op  cit., 
pp.  109-141. 

11  An  interesting  discussion  of  race  mixtures  at  the  beginning  of 
tke  Diaz  regime  in  Mexico  is  found  in  Antonio  Garcia  Cubas  and 
George  F.  Henderson,  op.  cit.,  pp.  12-20. 


18    MEXICO  AND  ITS  RECONSTRUCTION 

unleavened  Indian  peoples  and  those  of  white  blood, 
constitutes  at  the  present  time  over  half  of  the  total.  It 
is  the  hope  of  some  friends  of  Mexico  and  the  despera- 
tion of  others.  In  the  opinion  of  most  observers  it  is 
an  improved  stock  as  compared  to  the  aborigines,  quick 
to  learn  but  inconstant  in  the  application  of  the  lessons 
taught.  At  present  this  population  drifts  as  far  as  may 
be  into  the  lighter  occupations.  Unfortunately  it  shows 
an  unwillingness  to  undertake  manual  labor  and  a  de- 
sire for  an  education  of  a  literary  or  professional  sort 
that  will  assure  that  physical  labor  will  be  unnecessary. 

These  are  the  people  upon  whom  the  future  Mexico 
will  depend,  but  from  whom  she  has  not  yet  received 
constructive  leadership.  Their  ability  to  develop  the 
qualities  of  constancy  and  responsibility,  which  they 
now  lack,  will  determine  whether  Mexico  assumes  the 
independent  position  economically  and  politically  that 
her  physical  endowment  indicates  is  possible.  Unless 
the  trend  of  immigration  changes,  thus  upsetting  the 
racial  developments  now  in  progress,  Mexico  seems 
destined  to  become  a  mestizo  republic.  It  is  already 
far  on  the  way  to  becoming  one. 

Perhaps  no  characteristic  of  Mexican  life  speaks 
more  plainly  of  the  diversity  of  the  elements  entering 
into  its  composition  than  the  languages  spoken  by  the 
peoples  of  the  republic.  To  appreciate  the  degree  to 
which  the  existence  of  the  many  tongues  found  in  use 
indicates  lack  of  unity  one  must  bear  in  mind  the  im- 
mobile character  of  the  population,  the  low  state  of 
education,  and  the  lack  of  facilities  for  communication, 
all  elements  that  work  for  particularism. 


THE  POPULATION  OF  MEXICO        19 

The  great  majority  of  Mexicans,  of  course,  speak 
Spanish.  Of  those  included  in  the  language  enumera- 
tion in  1914,  88  per  cent  used  Spanish  as  the  usual 
means  of  communication.  The  rest  were  divided  among 
48  enumerated  tongues.  The  Nahuatl  or  Mexicano  was 
still  used  by  over  half  a  million,  the  Maya  by  227,883, 
the  Zapoteco  by  224,863,  and  the  Otomi  by  209,640. 
None  of  the  others  were  spoken  by  as  many  as  one  hun- 
dred thousand  and  some  were  evidently  disappearing 
remnants.12  Nevertheless  that  the  Spanish  tongue  has 
not  been  adopted  by  so  large  a  proportion  of  Mexicans 
in  the  four  hundred  years  since  dominion  was  estab- 
lished is  an  indication  that  the  church,  the  school,  and 
the  government  have  all  failed  to  bring  a  large  number 
of  Mexicans  into  touch  with  European  standards  of 
civilization. 

One  of  the  least  satisfactory  of  the  schedules  of  any 
census  is  that  dealing  with  religion,  because  the  declara- 
tion of  membership  in  a  church  made  to  the  enumerator 
may  mean  merely  an  occasional  attendance  or  an  almost 
inherited  membership.  The  religious  census  of  Mex- 
ico is  not  an  exception.  The  conversion  of  the  country 
to  Christianity  after  the  conquest  was  accomplished  un- 
der circumstances  similar  to  all  those  of  the  time.  It 
was  a  surface  conversion  and  often  hardly  that.  Even 
up  to  the  present  time  though  99  per  cent  of  the  popu- 
lation are  listed  as  Catholics,  the  depth  of  the  belief  of 
a  large  part  of  the  ignorant  lower  classes  is  obviously 
not  great. 

12  Boletin  de  la  direccion  general  de  estadistica,  5,  Mexico,  1914, 
p.  159. 


20    MEXICO  AND  ITS  RECONSTRUCTION 

That  there  is,  on  the  part  of  the  natives,  even  in  re- 
mote corners  of  the  country,  a  formal  devotion  is  beyond 
question.  Even  in  the  villages  of  interior  Yucatan,  miles 
from  a  railroad  or  from  anything  which  elsewhere  would 
he  dignified  by  the  name  of  a  wagon  road,  each  oval  mud 
and  stake  hut  has  its  family  altar  with  its  Virgin  and 
such  ornaments  as  its  barefoot  proprietor  and  his  wife 
can  provide.  In  such  communities,  it  appears  that  the 
church  has  exercised  quite  as  much  influence  as  the  state, 
which  is  the  more  remarkable  because  of  the  relations 
that  the  two  have  borne  to  each  other  since  the  Juarez 
period. 

The  fact  is,  however,  that  in  the  districts  away  from 
the  centers  of  civilization  and  the  railroads  neither  the 
state  nor  the  church  is  a  very  important  factor  in  the 
life  of  the  people.  The  functions  of  each  are  formal  to 
a  large  extent,  and  skillful  agitators  can  sway  the  popu- 
lace to  an  attack  on  one  as  easily  as  upon  the  other. 
Of  the  two,  if  anything,  the  church  seems  in  the  weaker 
position.  To  be  sure,  in  some  states  like  Puebla,  it 
seems  that  the  revolution  surged  about  the  bases  of  the 
cathedrals  yet,  as  a  rule,  left  them  unharmed ;  but  taking 
the  country  in  general  the  churches  fell  before  the  hands 
of  the  revolutionists  with  but  little  popular  protest. 
That  so  small  a  minority  as  that  which  grasped  the 
standard  of  revolution  in  Yucatan,  for  example,  could 
dominate  the  population  so  completely  and  make  them 
allow,  when  they  did  not  abet,  the  general  destruction 
of  church  property  does  not  show  that  the  church  held 
the  position  in  the  lives  of  the  people  that  the  census 
statistics  would  indicate. 


THE  POPULATION  OF  MEXICO       21 

The  fact  is  that  the  church  has  been  held  up  before 
the  people,  since  the  Laws  of  Reform,  as  an  influence 
threatening  the  life  of  the  republic.  It  has  been  used  as 
a  bogey  by  the  liberals  to  support  their  power  and  guard 
against  the  possibility  that  the  clergy  might  return  to 
their  former  position  of  influence  among  the  people. 
For  a  generation  and  a  half  at  least  it  has  been  unim- 
portant as  a  political  influence.  There  is  no  Catholic 
political  party  and  even  devoted  Catholics  have  been 
agreed,  at  least  until  recently,  that  it  would  be  inadvis- 
able to  form  one.  The  position  that  has  been  forced 
upon  the  church  by  political  developments  has  not  only 
destroyed  its  political  influence  very  largely,  but  has 
undermined  its  prestige.  It  has  not  been  able  to  con- 
tinue as  effectively  as  formerly  its  work  for  the  educa- 
tion of  the  Indian  population  nor  for  its  real  conver- 
sion. It  is  admitted  even  by  enthusiastic  churchmen 
that  in  the  districts  away  from  the  larger  cities  the  In- 
dian is  reached  only  in  a  formal  way  by  educational  in- 
fluences and  that  to  his  religion  he  is  attached  without 
an  understanding  of  any  but  its  most  simple  teachings. 

Nor  has  the  church  maintained  its  hold  upon  the  so- 
called  upper  class.  Formally  these  too  are  in  large  ma- 
jority Catholic  but  regular  church  attendance  has  ad- 
mittedly become  less  general,  especially  among  the  men, 
a  large  number  of  whom  are  more  or  less  openly 
agnostic. 

If,  however,  the  official  figures  be  relied  upon  to  give 
a  picture  of  Mexican  religious  conditions,  there  is  little 
to  show  that  the  campaign  against  the  Catholic  church 
by  political  leaders,  the  missionary  work  of  Protestant 


22    MEXICO  AND  ITS  RECONSTRUCTION 

churches,  or  the  gradual  infiltration  of  foreign  influ- 
ences have  had  much  effect  in  this  land,  which,  like 
others  under  Spanish  dominion,  was  once  Catholic  ex- 
clusively and  perforce.  Of  the  15,160,369  Mexicans 
listed  in  the  census  of  1910,  15,011,176  were  Catholics; 
68,839  were  Protestants;  6,237,  Buddhists;  602,  Mo- 
hammedans; 630,  Greek  Orthodox;  254,  Israelites;  and 
5,605  of  other  faiths.13 

Even  the  latest  statistics  of  the  Mexican  population 
give  no  adequate  basis  on  which  a  statement  can  be  made 
concerning  the  general  education  of  the  people.  The 
school  system  is  not  well  developed.  Illiteracy  is  still 
very  high.  With  the  figures  available  it  is  impossible 
to  make  more  than  general  statements  concerning  either 
the  total  population  unable  to  read  and  write  or  the 
relative  illiteracy  in  different  parts  of  the  country.  The 
census  of  1910  reports  that  among  the  15,160,369  per- 
sons enumerated,  7,065,464  are  persons  12  years  of  age 
or  over  who  do  not  know  how  to  read  or  write.  Com- 
parisons of  census  figures  in  other  countries  indicate  that 
the  portion  of  the  population  less  than  12  years  of  age 
is  roughly  one-sixth.  This  would  indicate  that  the  illit- 
erate population  12  years  of  age  or  over  constituted 
about  52  per  cent  of  the  total.  As  a  basis  of  compari- 
son may  be  taken  the  statement  that  of  the  population 
of  the  United  States  over  10  years  of  age  in  1910,  7.7 
per  cent  were  reported  illiterate.  The  figures  make  a 

13  Ibid.,  p.  155.  A  good  discussion  of  the  cKurcK  as  an  element 
in  the  social  life  of  Mexico  is  found  in  Wallace  Thompson,  op.  ctt., 
pp.  170-194.  See  also  Manuel  Calero,  Ensayo  sobre  la  reconstruc- 
tion de  Mexico,  New  York,  1920,  p.  12  et  seq.,  and  p.  37  et  seq. 


THE  POPULATION  OF  MEXICO       23 

much  more  favorable  showing  than  those  in  unofficial 
estimates.  These  indicate  an  illiteracy  ranging  between 
80  and  85  per  cent.14  Some  of  such  estimates  are  based 
on  the  total  population,  which  is  evidently  an  unfair 
standard  if  education  is  being  considered  in  relation  to 
ability  to  understand  public  affairs  as  presented  through 
the  printed  page  and  in  relation  to  ability  for  self-gov- 
ernment. The  estimates  of  many  careful  observers 
agree,  however,  that  the  census  returns,  even  making  all 
allowances,  present  the  picture  in  a  very  favorable  light 
and  calculate  the  illiteracy  of  even  the  adult  population 
at  near  to  70  or  75  per  cent. 

Whichever  standard  most  closely  approximates  the 
truth,  it  is  clear  that  literacy  in  Mexico,  as  elsewhere, 
if  taken  as  a  test  of  general  intelligence  must  be  con- 
sidered along  with  the  actual  amount  of  reading  done 
by  the  population,  the  circulation  of  books,  magazines, 
and  newspapers,  and  the  general  intellectual  activity  of 
the  community.  In  these  respects  the  life  of  Mexico, 
with  the  exception  of  that  in  the  cities,  is  backward, 
even  more  so,  it  seems  clear,  than  the  official  figures  or 
individual  estimates  indicate. 

Accepting  the  official  figures  as  a  basis  for  compari- 
son of  the  relative  prevalence  of  illiteracy  in  different 
districts  it  appears,  as  would  be  expected,  that  the 
northern  states  and  those  in  which  the  larger  cities  of 

14  T.  Esquivel  Obregon,  Influencia  de  Espana  y  los  Estados 
Unidos  sobre  Mexico,  Madrid,  1918,  p.  102,  asserts  that  93  per  cent 
of  the  voting  population  of  Mexico  is  illiterate.  Jorge  Vera- 
Estanol  in  his  Carranza  and  His  Bolshevik  Regime,  Los  Angeles, 
1920,  p.  33,  estimates  the  illiterates  at  "over  four-fifths"  of  the 
population. 


24    MEXICO  AND  ITS  RECONSTRUCTION 

the  central  plateau  are  located  make  a  better  showing 
than  the  rest  of  the  country.  These  are  the  regions 
where  foreign  influence  has  made  itself  most  felt  and 
where  the  government  supervision  of  education  has  been 
most  effective.15 

The  census  of  1910  does  not  classify  the  population 
in  a  way  that  makes  possible  more  than  a  very  general 
statement  concerning  the  activities  to  which  the  people 
devote  themselves.  In  some  cases  there  is  great  detail, 
as  in  the  enumeration  of  the  single  archeologist  and  the 
lone  apiculturist  with  which  the  country  is  credited.  In 
another  case  58,840  persons  are  lumped  as  "workers  in 
industrial  establishments."  The  enumeration  of  the 
chief  classes  given  in  the  table  below  is  valuable  only 
for  the  general  picture  it  gives  of  the  proportion  as- 
signed to  the  larger  divisions,  and  as  an  indication  of 
the  undiversified  character  of  the  national  economic  life. 

CHIEF  OCCUPATIONS  IN  MEXICO  16 

Unproductive,  chiefly  minors  and  students 5,423,170 

Domestic  workers    4,673,804 

Agricultural  workers,  including  3,130,402  peons . .  .  3,570,674 

Industries   723,023 

Commerce,  including  236,278  listed  as  merchants.  .  .  275,130 

Mining ., 95,878 

15  The  examination  of  the  reports  for  individual  states,  however, 
does  much  to  destroy  faith  in  the  value  of  the  educational  enumer- 
ation.    The  difference  in  the  percentage  of  illiteracy  announced  in 
various  districts  seems  much  less  than  what  must  be  the  fact  when 
the  known  inadequacy  of  the  school  system  in  some  states  is  con- 
sidered and  seems  to  indicate  that  the  census  must  have  been  taken 
very  carelessly  or  that  the  test  of  what  was  to  be  considered  ability 
to  read  and  write  was  very  low. 

16  None  of  the  other  general  classes  includes  100,000  souls.    There 


THE  POPULATION  OF  MEXICO        25 

In  point  of  numbers  the  foreign-born  population  is 
negligible.  They  do  not  reflect  in  even  a  faint  degree 
the  extent  to  which  foreign  enterprise  and  foreign  cap- 
ital have  entered  the  country.  Mexico  never  received 
from  the  mother  country  a  great  stream  of  immigrants 
that  in  a  true  sense  Europeanized  her  population  nor 
have  other  lands  greatly  contributed.  How  many  there 
are  of  the  foreign-born  or  of  those  who  keep  their  for- 
eign nationality  through  inheritance  though  born  in 
Mexico  cannot  be  exactly  determined.  It  is  generally 
estimated  at  a  higher  figure  than  the  census  indicates, 
though  the  official  enumeration,  in  this  case,  may  be 
more  nearly  correct  than  for  the  people  as  a  whole  be- 
cause the  foreigners  are  generally  in  the  industrial  areas 
where  the  count  is  more  easily  made.  In  1854  there 
were  9,864  foreigners  in  Mexico  who  had  taken  out 
"Letters  of  Security,"  of  these  59  per  cent  were  Span- 
ish, 22  per  cent  were  French.  English,  Germans,  and 
Americans  formed  about  6  per  cent  each.  A  generous 
estimate  of  those  in  the  country  in  1861  places  the  total 
foreign  population  at  25,000.17 

All  told  there  were  enumerated  in  the  census  of  1910 
only  115,972  foreign  born  and  of  these  only  658  had  ac- 
cepted the  nationality  of  the  land  of  adopted  residence. 

are  evident  inconsistencies  in  classification.  Railway  workers,  for 
example,  are  not  classified  under  transportation  though  sailors  are, 
and  under  miscellaneous  are  placed  many  classes  that  should  appar- 
ently go  under  industries.  The  figures  are  from  Boletin  de  la  direc- 
clon  general  de  estadistica,  5,  Mexico,  1914,  p.  95.  A  more  detailed 
analysis  of  occupations  in  Mexico  is  given  in  Wallace  Thompson, 
op.  cit.,  pp.  315-47. 

11  Carlos  Butterfield,  op.  cit.,  p.  11. 


26    MEXICO  AND  ITS  RECONSTRUCTION 

The  foreigner  in  Mexico  is  not  on  the  road  to  becom- 
ing a  citizen,  as  is  the  case  in  the  United  States.  He  is  a 
foreigner  and  he  intends  to  remain  one  and  that  his  son 
even  though  born  in  Mexico  shall  be  one.  In  only  about 
one  case  in  175  does  he  who  can  remain  a  foreigner  be- 
come a  Mexican.  In  1910  of  those  enumerated  who 
had  become  Mexicans,  a  little  less  than  one-third  were 
Spaniards  and  one-fifth  were  citizens  of  the  United 
States.  One  Spaniard  in  every  140  became  naturalized, 
one  American  in  every  155.  Forty-five  per  cent  of  the 
naturalized  citizens  lived  in  the  Federal  District  and  32 
per  cent  in  the  states  along  the  northern  frontier. 
Eleven  per  cent  lived  in  Puebla.  A  naturalized  citizen 
elsewhere  in  Mexico  is  a  rara  avis. 

Of  the  115,314  foreigners  who  had  kept  their  nation- 
ality 25  per  cent  were  Spaniards,  18  per  cent  were 
Guatemalans  who  had  crossed  the  southern  border 
chiefly  to  stay  in  the  coffee  districts,  and  almost  18  per 
cent  were  Americans.  Eleven  per  cent  were  Chinese 
and  another  11  per  cent  was  made  up  of  French,  Ger- 
mans, and  Cubans.  More  than  half  of  the  Americans 
resident  in  Mexico  were  reported  from  the  northern 
states,  Chihuahua,  Sonora,  Coahuila,  and  Nuevo  Leon, 
ranking  in  the  order  indicated.18 

No  study  of  Mexican  conditions  can  show  the  under- 
lying causes  making  the  republic  a  problem  to  itself  and 
to  its  neighbors  which  overlooks  the  elements  that  have 
been  briefly  sketched  in  this  chapter.  A  varied  popula- 
tion, native,  mestizo,  and  white,  without  a  cultural  basis 

18  The  above  figures  are  compiled  from  Boletln  de  la  direction 
general  de  estadistica,  5,  Mexico,  1914,  pp.  18,  32,  39,  53,  65  and  75. 


THE  POPULATION  OF  MEXICO        27 

upon  which  to  create  a  uniform  civilization,  living  in 
territory  of  wide  climatic  contrasts,  of  necessity  has  seri- 
ous problems  to  solve. 

The  population  of  Mexico  is  a  group  of  peoples 
among  whom  primitive  tongues  are  still  spoken  by  a 
considerable  portion,  and  among  whom  the  standard  of 
life,  even  among  those  speaking  a  European  tongue,  is 
still  of  a  very  simple  type.  They  are  peoples  largely 
illiterate  and  among  whom  literary  and  professional, 
rather  than  vocational,  education  has  been  held  up  as 
the  standard  to  be  sought  for.  They  are  non-industrial 
and,  up  to  the  present,  as  a  rule  non-industrious.  The 
development  of  the  resources  of  the  country  has  fallen 
into  the  hands  of  foreigners  who,  however  great  the 
benefits  they  have  conferred  upon  the  country,  do  not 
become  a  part  of  its  political  life  as  well  as  of  its  eco- 
nomic life.  Those  who  seek  to  bring  Mexico  out  of  these 
conditions  into  the  course  of  the  civilization  that  we  have 
come  to  know  as  European  have  before  them  no  easy 
task. 


CHAPTER  III 

THE  GOVERNMENT  OF  MEXICO:  EXECUTIVE 
GOVERNMENT 

CITIZENS  of  the  United  States  take  a  certain  pride  in 
stating  that  the  governments  of  the  new  world  are  re- 
publican, that  they  are  set  up  under  constitutions,  and 
depend  upon  popular  vote.  Probably  the  great  major- 
ity, when  they  make  such  statements,  think  of  our  own 
political  institutions  and  assume  that  those  of  the  other 
republics  from  the  Mexican  frontier  to  Cape  Horn  are 
similar  in  their  organization.  But  republican  govern- 
ment, democratic  institutions,  and  popular  elections  in 
the  sense  in  which  the  people  of  the  United  States  are 
accustomed  to  use  such  terms  flourish  only  under  special 
conditions,  conditions  that  the  majority  of  the  republics 
of  the  new  world  have  not  attained. 

Even  in  the  most  advanced  states  the  rules  under 
which  citizens  actually  live  are  determined  by  the  admin- 
istration of  the  laws  as  well  as  by  their  spirit ;  but  if  re- 
publican institutions  and  democracy  mean  anything  in 
practical  affairs,  they  mean  a  rule  of  practice  as  well  as 
an  ideal  to  which  the  leaders  of  public  life  profess  al- 
legiance. They  mean  that  the  standards  set  forth  in  the 
law  must  correspond  at  least  approximately  to  those 
observed  in  the  everyday  life  of  the  community,  and 
that  neither  the  executive  nor  any  other  part  of  the  gov- 
ernment can  act  contrary  to  the  popular  will  as  ex- 

28 


EXECUTIVE  GOVERNMENT  29 

pressed  in  the  constitution  and  the  laws.  In  many  states 
of  the  New  World  that  standard  has  not  been  reached 
• — it  has  not  been  reached  in  Mexico. 

It  is  not  necessary  to  review  the  history  of  the  various 
constitutions  of  Mexico  to  show  that  there  the  funda- 
mental law  has  outlined  an  ideal  standard  of  action  and 
not  a  rule  for  everyday  observance.  A  comparison  of 
the  norm  set  by  the  constitution  of  1857  under  which  the 
republic  lived  through  all  the  orderly  period  of  its  exist- 
ence with  the  practice  of  the  government  in  the  same 
period  will  illustrate  the  degree  to  which  even  in  time  of 
peace  the  observance  of  the  constitution  has  continued 
to  be  an  unrealized  ambition. 

In  its  main  outlines  this  constitution,  like  its  predeces- 
sors, was  very  much  like  the  Constitution  of  the  United 
States  of  America.  There  was  an  attempt  to  establish 
a  division  of  powers  among  three  branches  of  the  gov- 
ernment. The  legislative  function  was  vested  in  a  Con- 
gress composed  of  the  Chamber  of  Deputies  and  the 
Senate.  The  members  of  the  former  were  elected  for 
terms  of  two  years  by  Mexican  citizens  qualified  to  vote, 
from  districts  of  a  population  of  40,000  or  major  frac- 
tion. Those  elected  must  be  at  least  25  years  of  age, 
residents  of  their  districts,  and  not  members  of  ecclesias- 
tical orders.  The  senators  were  elected  by  an  electorate 
qualified  as  was  that  which  chose  the  deputies,  two  being 
selected  from  each  state.  The  requirements  for  can- 
didacy were  the  same  as  for  the  deputies  except  that  the 
senators  had  to  be  at  least  30  years  old.  Their  term  was 
six  years. 

The  executive  power  was  centered  in  the  President  of 


30    MEXICO  AND  ITS  RECONSTRUCTION 

the  United  Mexican  States,  elected  indirectly  for  a  terra 
of  four  years,1  and,  by  an  amendment  to  the  constitution 
of  1857  under  date  of  December  20, 1890,  eligible  for  re- 
election indefinitely.  Candidates  for  the  Presidency  had 
to  be  native  born  Mexicans,  at  least  35  years  of  age, 
residents  of  the  country  at  the  time  of  the  election,  and 
not  members  of  ecclesiastical  orders.  A  cabinet  assisted 
the  President  in  the  administration  of  the  government. 
The  judicial  power  was  vested  in  the  Supreme  Court 
of  Justice  and  district  and  circuit  courts  elected  by  the 
people  indirectly  for  terms  of  six  years.  The  jurisdic- 
tion of  the  federal  courts  was  very  similar  to  that  of  the 
federal  courts  in  the  United  States. 

The  rights  of  the  citizen  against  the  government  were 
carefully  guarded  in  a  bill  of  rights.  All  men  born  in 
the  republic  were  declared  free.  Slaves  became  free  on 
touching  Mexican  soil.  Freedom  of  thought  and  of  the 
press  were  guaranteed.  The  right  of  petition  was  rec- 
ognized as  was  the  right  to  bear  arms  and  the  right 
freely  to  travel  in  the  republic.  Private  property  could 
not  be  taken  for  public  use  without  due  compensation, 
quartering  of  soldiers  in  time  of  peace  was  prohibited 
as  was  search  without  warrant.  Titles  of  nobility,  im- 
prisonment for  civil  debts,  and  imprisonment  without 
trial  for  a  period  longer  than  three  days  were  abolished. 
There  could  be  no  cruel  and  unusual  punishments  nor 

1  The  term  was  made  six  years  in  1904  after  "unanimous  appro- 
val of  the  legislatures  of  the  States."  The  final  declaration  by  the 
Mexican  Congress  is  published  in  Papers  Relating  to  the  Foreign 
Relations  of  the  United  States,  1904,  p.  491.  The  elaborate  in- 
auguration ceremonies  are  described  at  p.  493. 


EXECUTIVE  GOVERNMENT  31 

monopolies,  except  certain  ones  which  the  state  might 
set  up. 

A  degree  of  responsibility  was  given  to  the  individual 
states  similar  to  that  given  the  states  of  the  American 
Union.  They  had  like  limitations.  In  law  their  gov- 
ernments were  described  as  republican,  representative, 
and  popular.  They  had  the  same  general  divisions  of 
powers  as  the  central  government.  The  legislative 
power  in  the  majority  of  the  states  was  vested  in  a  single 
representative  body  called  a  Congress.  The  members, 
in  most  cases,  were  chosen  indirectly  for  terms  of  two 
years.  The  executive  power  was  in  the  hands  of  a  gov- 
ernor chosen  almost  without  exception  indirectly  and 
serving  four  years.  The  majority  of  the  states  had  su- 
preme courts  with  a  system  of  inferior  courts  and 
judges. 

In  short,  the  Mexican  constitution  of  1857  set  up  a 
frame  of  government  that  had  all  the  nominal  guaran- 
tees necessary  for  the  establishment  of  a  popular  gov- 
ernment of  the  sort  that  had  been  created  north  of  the 
Rio  Grande  in  a  sister  republic,  whose  constitution  Mex- 
ican statesmen,  almost  without  exception,  have  ad- 
mired.2 

The  theory  of  the  Mexican  constitution  was  never  put 
into  practice  in  either  the  central  government  or  the 
states.  The  fundamental  concept  of  the  division  of 
powers  between  the  three  departments  was  never  ob- 
served. In  the  period  of  confusion  between  the  issuance 

2  A  cogent  criticism  of  the  influence  of  the  example  of  the  United 
States  upon  Mexico  is  found  in  T.  Esquivel  Obregon,  Influencia  de 
Espana  y  los  Estados  Unidos  sobre  Mexico,  Madrid,  1918,  passim. 


32    MEXICO  AND  ITS  RECONSTRUCTION 

of  the  constitution  of  1857  and  the  Diaz  regime,  public 
and  private  right  were  so  disturbed  that  it  is  useless  to 
attempt  a  discussion  of  the  degree  to  which  the  various 
leaders  sought  to  observe  the  commands  of  the  consti- 
tution. With  the  coming  of  Diaz  the  theoretic  balance 
of  power  was  lightly  brushed  aside  and  an  executive 
government  was  established  that  used  the  legislative 
and  judicial  branches  as  its  agents. 

One  of  the  leading  Mexican  newspapers,  contrasting 
law  and  fact,  declared  in  1878,  "The  constitution  of 
1857  is  an  ideal  law,  made  for  an  abstract  man;  it  is 
necessary  to  make  it  a  Mexican  law,  adapted  to  our 
present  condition  and  endow  the  state  with  all  the  vigor 
to  recover  from  the  long  and  dolorous  experience  of  a 
half  century  of  civil  disturbances."  It  concludes,  "legal 
precept  is  not  in  consonance  with  the  necessities  of  life, 
arbitrary  power  and  despotism  are  the  only  regimen 
possible  in  societies  like  ours."  Under  the  existing  con- 
ditions perhaps  the  conclusion  was  justified  and  the  best 
that  could  be  done,  since  the  form  of  the  constitution 
was  not  changed,  was  to  keep  it  as  an  ideal,  though  not 
a  measure  of  existing  rights.  Theoretically,  of  course, 
the  policy  adopted  was  altogether  indefensible.  Its  jus- 
tification was  that  it  might  keep  Mexico  from  falling 
to  pieces,  raise  the  country  in  the  estimation  of  the 
world,  and  bring  to  it  that  solid  basis  for  economic  de- 
velopment, which  must  be  the  foundation  of  any  consist- 
ent national  progress.4 

3  Quotations  from  La  Libertad  in  Papers  relating  to  the  foreign 
relations  of  the  United  States,  1878,  p.  658. 

*  See  a  discussion  of  federal  as  opposed  to  centralized  govern- 


EXECUTIVE  GOVERNMENT  33 

The  first  functions  of  the  government  in  the  opinion 
of  those  who  supported  the  new  regime  were  the  estab- 
lishment of  order  and  the  collection  of  funds  by  which 
the  foreign  obligations  could  be  met  and  property  pro- 
tected at  home.  Policing  and  taxing  were  the  most  im- 
portant, and,  at  first,  the  only  important  services  ren- 
dered. Government  as  an  expression  of  general  pub- 
lic opinion,  as  a  factor  in  the  citizen's  life  because  it  was 
a  part  of  him  and  he  of  it,  that  sort  of  government  did 
not  exist.  It  was  not  a  spontaneous  outgrowth  of  the 
national  character  but  something  imposed  from  above 
by  a  group,  whose  control  was  justified  by  the  ac- 
quiescence of  a  people  that  had  no  public  opinion  organ- 
ized for  determining  upon  whose  shoulders  the  respon- 
sibility of  governing  should  rest.  A  true  republican 
government  could  not  come  into  existence,  it  was  ar- 
gued, by  the  fiat  of  a  constitution.  It  could  not  become 
an  actuality  until  there  was  born  a  public  opinion  rest- 
ing on  education  and  common  ideals.  It  could  not  rise 
until  the  diverse  elements  of  which  the  nation  was  com- 
posed developed  a  solidarity  of  interest  founded  on  a 
better  basis  than  common  oppositions  and  the  accidents 
of  history. 

The  degree  to  which  the  policing  function  demanded 
and  received  the  attention  of  the  government  is  reflected 
in  the  appropriations  for  military  expenditures  through- 
out the  Diaz  regime.  This  was  a  period  after  the  two 
invasions  by  foreign  troops  that  the  republic  has  suf- 
fered. It  was  one  in  which  the  military  problems  were 

ment  in  Mexico,  by  L.  S.  Rowe,  Annals  of  the  American  Academy 
of  Political  and  Social  Science,  vol.  54,  p.  226,  July,  1914. 


34    MEXICO  AND  ITS  RECONSTRUCTION 

almost  exclusively  domestic  yet  the  army  continued  to 
figure  largely  in  the  national  budget. 

In  the  late  '70s  the  federal  government  maintained 
an  army  of  30,000  men  whose  demands  required  two- 
fifths  of  the  entire  revenue.  Notwithstanding  this  the 
chief  item  of  expenditures  of  the  states  was  also  for 
military  purposes.  These  forces,  usually  called  state 
guards,  might  be  expected  to  be  necessary  in  the  out- 
lying regions  where  the  arm  of  the  national  government 
could  not  be  relied  upon.  In  fact  even  populous  states 
near  the  capital  maintained  them.  The  State  of  Mexico 
itself  spent  about  30  per  cent  of  its  revenues  on  its  sol- 
diers. Puebla,  Jalisco,  and  others  among  the  more  ad- 
vanced of  the  Mexican  units  did  the  same.0  Doubtless 
these  local  forces  were  at  times  needed  for  policing  pur- 
poses, but  their  existence  made  the  raising  of  a  revolu- 
tion against  the  national  government  easier.  It  was  the 
natural  impulse  of  the  central  government  to  bring  them 
under  ifs  own  control  as  far  as  possible  in  order  to  mini- 
mize the  chance  that  its  own  power  might  be  questioned. 

Commenting  on  a  report  made  to  the  federal  Con- 
gress by  one  of  its  members  a  Mexican  editor  analyzes 
governmental  conditions  in  1879  as  follows:8 

The  vast  territory  of  this  country  is  in  its  greatest  part 
divided  into  petty  kingdoms,  subject  to  the  whims  of  little  local 
tyrants,  who  inflict  upon  their  unfortunate  subjects  every  class 
of  outrage  and  vexation.  Neither  life  nor  property,  nor  any 
of  the  other  individual  rights,  have  guarantees  of  any  kind ;  of 

5  Papers  Relating  to  the  Foreign  Relations  of  the  United  States, 
1879,  p-  835  et  seq. 
8  Ibid.,  p.  826  et  seq. 


EXECUTIVE  GOVERNMENT  35 

the  administration  of  justice  there  exists  nothing  but  a  vain 
pretense,  and  public  morality  has  passed  into  the  category  of 
unrealizable  dreams. 

To  remedy  such  conditions  President  Diaz  at  once 
set  his  hand.  The  army  was  the  instrument  on  which 
he  relied.  One  of  the  developments  with  which  he  was 
best  satisfied  at  the  end  of  his  first  term  was  the  "great 
and  undoubted  progress  .  .  .  made  in  the  organization 
of  an  efficient  police,  both  metropolitan  and  rural;  the 
latter  being  distributed  not  only  in  the  federal  district 
but  throughout  the  various  states  of  the  republic." 
Throughout  his  period  of  control  the  President  con- 
tinued to  rely  on  the  military  power  as  the  factor  that 
should  keep  the  nation  in  equilibrium. 

The  emphasis  of  the  policy  of  policing  the  country 
by  forces  increasingly  under  the  control  of  the  central 
government,  of  itself  emphasized  the  executive  func- 
tions of  that  government.  The  ignorance  of  the  people 
and  their  inexperience  in  self-governing  institutions 
prompted  doubts  as  to  the  possibility  of  truly  popular 
elections  and  as  to  the  advisability  of  entrusting  more 
than  the  form  of  power  to  legislators  or  judges  who 
might  be  selected  by  them.  As  a  result,  to  protect 
itself,  the  executive  and  the  small  circle  that  surrounded 
him  came  to  consider  it  a  necessity  not  only  to  control 
the  administration  local  and  central,  partly  through  the 
political  organization  and  partly  through  the  army  but 
also  to  take  from  the  legislature  and  the  courts  any  real 

7  Paraphrased  from  address  of  President  Diaz  to  the  Mexican 
Congress  in  ibid.,  1889,  p.  553. 


36    MEXICO  AND  ITS  RECONSTRUCTION 

freedom  of  action.  These  became  bodies  that  in  prac- 
tice registered  the  will  of  the  administration. 

Even  though  a  state  has  not  a  people  who  have  risen 
to  conditions  that  may  make  a  true  popular  government 
possible,  it  may  have  a  constitutional  government  if  the 
small  governing  class  is  organized  for  expressing  its 
own  divisions  of  sentiment  and  disposed  to  respect  the 
provisions  of  the  constitution  by  abiding  by  the  deci- 
sions so  expressed.  Mexico  has  not  arrived  at  that 
status.  Admirable  as  are  the  intellectual  qualities  of  the 
upper-class  Mexican,  he  has  not  yet  developed  a  spirit 
of  cooperation  and  forbearance  which  leads  him  to  com- 
ply with  constitutional  standards  in  the  choice  of  public 
officials  even  by  the  small  class  to  which  he  belongs.  He 
has  not  shown  a  willingness  to  give  obedience  to  the 
standards  that  the  opinion  thus  narrowly  determined  de- 
mands. Unfortunately  for  Mexico  her  political  life  has 
seldom  indeed  risen  above  a  camarilla  stage  and  the  rul- 
ing camarilla  has  seldom  been  strong  enough  to  control 
the  man  who  for  the  moment  was  at  its  head. 

No  government  in  power  in  Mexico  in  the  old  regime 
ever  failed  to  control  the  elections  that  it  called.  To 
be  sure  there  were  dissenting  groups  that  did  succeed 
not  infrequently  in  defeating  the  government  candi- 
dates in  the  Congressional  elections  but  they  never  rose 
to  the  dignity  of  true  parties  and  their  success  could 
have  been  cut  down  doubtless  had  the  administration 
felt  it  necessary  or  politic  to  do  so. 

Even  a  class  government  may  be  a  step  toward  de- 
mocracy. Mexico,  properly  speaking,  has  never  had  a 
governing  class.  She  did  not  have  it  under  Diaz  and 


EXECUTIVE  GOVERNMENT  37 

the  failure  of  the  dictator  to  take  effective  steps  to  create 
either  a  governing  class  that  could  fight  out  within 
itself  the  national  policies,  or  a  popular  educational  sys- 
tem that  would  prepare  the  people  as  a  whole  for  self- 
government  was  a  signal  failure  of  the  government  he 
created. 

Under  the  old  dictatorship  Mexico  drifted  on  into 
the  twentieth  century,  into  a  century  in  which  the 
changes  that  had  come  in  her  national  life  and  her  short- 
comings both  stood  out  in  sharp  relief.  It  was  a  new 
economic  Mexico  with  railroads,  telegraphs,  newspa- 
pers, and  an  increasing  number  of  foreigners,  all  of 
which  brought  enlightenment  through  touch  with  the 
outside  world.  But  among  the  advantages  that  had 
come  from  the  new  day,  ability  in  self-government  was 
not  numbered.  Economic  improvements  had  been  in- 
troduced from  abroad  and  had  become  a  vital  part  of 
Mexican  life.  But  the  political  training  of  the  people 
was  given  no  attention. 

In  the  actual  problems  of  ruling  themselves,  the 
rough  give  and  take  of  political  contests  properly  so 
called,  the  Mexican  at  the  winning  of  independence  was 
still  fairly  comparable  to  the  Mexican  of  the  conquest. 
He  had  seen  the  light,  wanted  to  follow  the  ideals  that 
republicanism  and  self-government  stood  for  in  other 
countries,  but  he  was  almost  totally  inexperienced.  To 
say  that  in  the  interval  between  independence  and  the 
beginning  of  the  twentieth  century  the  Mexican  had 
made  no  advance  in  self-government  would  be  unfair 
but  it  is  true  that  he  had  not  markedly  improved  his  po- 
sition. Republicanism  and  self-government  had  come 


38    MEXICO  AND  ITS  RECONSTRUCTION 

to  mean  more  in  1912  than  they  did  in  1812  but,  rela- 
tively speaking,  the  Mexican  people  were  little  if  any 
nearer  the  standard  set  by  the  leading  self-governing 
peoples  of  the  world  after  a  century  of  independence. 
Disorder  followed  by  dictatorship  had  hindered  the 
development  of  true  political  institutions  or  the  success- 
ful adoption  of  the  examples  offered  in  the  experience 
of  other  nations.  The  Mexican  had  advanced  in  mat- 
ters of  government  but  had  not  gained  on  the  leaders. 
He  had  buffeted  through  a  long  list  of  revolutions  but 
without  a  broadly  constructive  political  experience.  He 
had  developed  political  leaders  but  no  political  parties. 

The  degree  to  which  the  government  of  Mexico  was 
executive  can  be  appreciated  by  analyzing  the  way  in 
which  public  authority  was  exercised  in  the  first  years 
of  the  twentieth  century — a  period  when  the  power  of 
the  old  regime  was  well  established  and  when  continued 
peace  had  developed  what  for  Mexico  could  be  consid- 
ered normal  conditions. 

Power  continued  to  rest  in  the  hands  of  the  President 
of  the  Republic  as  it  had  rested  in  the  hands  of  the  exec- 
utive in  the  colonial  period.  In  practice  the  President 
controlled  the  elections,  he  determined  thus  whether  he 
should  succeed  himself  and  who  should  constitute  the 
legislatures,  federal  and  state.8  To  him  the  obedient 
Congress  gave  power  to  legislate  by  decree  on  specific 

8  In  some  cases  in  the  latter  part  of  the  Diaz  period  there  seemed 
to  be  the  elements  of  an  independent  party  organization.  The  most 
important  was  the  development  under  the  leadership  of  Bernardo 
Reyes  in  the  north.  Sporadic  defeats  elsewhere  in  local  elections 
were  not  unknown. 


EXECUTIVE  GOVERNMENT  39 

matters  or  on  entire  subjects,  or  it  passed,  with  only  a 
show  of  discussion,  the  drafted  legislative  measures  sub- 
mitted to  it  by  the  President. 

The  exercise  of  these  wide  powers  by  the  executive 
did  not  originate  with  Diaz;  it  did  not  end  with  his  fall. 
By  decree  even  such  fundamental  matters  as  tariffs  and 
other  forms  of  taxation  were  decided  upon  by  the  dic- 
tator and  the  same  method  has  been  followed  by  his 
successors.  Congress  abdicated  to  President  Diaz  the 
power  to  issue  in  his  discretion  bonds  against  the  credit 
of  the  state.9  By  his  authority  a  controlling  interest  in 
railway  lines  was  acquired,  Congress  merely  giving  its 
assent  after  all  the  details  were  arranged.  In  a  word, 
the  powers  of  Congress  had  never  been  recognized  as  of 
the  nature  and  extent  that  the  constitution  outlined. 
They  had  not  atrophied,  for  they  had  never  truly  de- 
veloped. 

The  Congress,  in  fact,  was  never  independent  either 
in  personnel  or  in  powers.10  It  was  a  body  composed 
largely  of  persons  who  did  not  live  in  the  districts  they 
represented,  a  gathering  of  carefully  selected  men  often 
of  decided  oratorical  powers,  a  dignified  body  in  which 
true  clash  of  opinion  occurred  only  on  such  matters  as 
were  indifferent  to  the  executive.11  Some,  at  the  time 

8  A  similar  power  was  conferred  upon  President  Carranza. 

10  The  constitution  is  considered  by  many  to  have  contemplated 
legislative  ascendancy.     See  R.  Garcia  Granadas,  La  Constitution 
de  1857  y  las  leyes  de  reforma  en  Mexico,  passim. 

11  A  description  of  the  way  in  which  opposition  sentiment  was 
controlled  early  in  the  old  regime  is  found  in  the  Nation,  vol.  41,  p. 
394,  November  12,  1885.     See  also  T.  Esquivel  Obregon,  op.  tit., 
passim. 


40    MEXICO  AND  ITS  RECONSTRUCTION 

of  their  election,  were  already  state  or  federal  office- 
holders and  by  the  vote  of  the  indulgent  Congress  to 
which  they  had  been  chosen  were  allowed  to  hold  both 
the  old  and  the  new  offices  at  the  same  time. 

The  courts  have  never  been  a  coordinate  part  of  the 
government  in  Mexico,  though  that  has  regularly  been 
an  announced  ideal.  The  federal  judges  under  the  old 
constitution  were  nominally  elected  and  those  of  the 
state  courts  were  generally  chosen  by  the  governor.  In 
any  case,  the  executive,  state  or  federal,  regularly  con- 
trolled the  selection.  Since  the  federal  executive  had 
influence  in  the  choice  of  the  governors  of  the  states, 
the  courts  from  the  highest  to  the  lowest,  in  practice, 
were  his  own  creatures. 

In  its  treatment  of  the  courts  in  the  latter  part  of  the 
Diaz  regime  the  executive  seems  to  have  found  itself 
drawn  between  conflicting  impulses.  The  President  was 
urged  by  certain  of  his  advisers  to  make  the  ideal  of  an 
independent  judiciary  a  fact  and  it  is  alleged  he 
desired  to  do  so.  He  is  said  to  have  hesitated  to 
put  property  rights  under  the  unrestricted  control 
of  the  courts  because  of  the  unfortunate  effects 
both  national  and  international  which  such  a  step  might 
involve.  From  the  national  point  of  view  it  was  of  the 
greatest  importance  that  the  flow  of  foreign  capital  into 
Mexican  investments  should  not  cease.  If  anti-foreign 
prejudice  in  the  courts,  especially  the  local  courts,  pro- 
duced decisions  that  would  discourage  investment,  it  was 
argued  that  the  economic  development  of  the  republic 
would  be  hindered.  Furthermore  if  foreigners  were 
denied  justice,  they  might  take  their  claims  to  their  own 


EXECUTIVE  GOVERNMENT  41 

governments  with  diplomatic  complications  as  a  result. 
If  the  executive  kept  an  effective  control  over  the  courts, 
such  unfortunate  circumstances  could  be  avoided.  The 
traditional  policy  of  concentration  of  power,  so  far  as 
it  affected  the  courts,  could  be  bolstered  evidently  with 
arguments  of  a  concrete  character.  To  the  end  of  the 
Diaz  regime  the  often  promised  freedom  of  the  judi- 
ciary remained  an  unrealized  ideal. 

The  fact  is,  then,  that  the  government  of  Mexico, 
when  it  has  deserved  that  name,  has  been  an  executive 
government.  When  the  executive  has  been  responsbile 
and  has  had  effective  control,  life  and  property  for  citi- 
zens and  foreigners  have  been  safe.  If  the  executive 
has  become  irresponsible,  life  and  property  have  been 
insecure.  When  the  executive  has  lost  control,  Mex- 
ico has  become  a  geographical  expression  and  not  a  gov- 
ernment.12 

12  An  article  describing  the  development  of  executive  control  in 
the  Gonzalez  period  is  found  in  the  Nation,  vol.  34,  p.  399,  May 
II,  1882.  The  executive  influence  exercised  in  modifying  the  con- 
stitution before  the  last  election  of  Diaz  is  described  in  the  Nation, 
vol.  78,  p.  4,4,8,  June  9,  1904. 


CHAPTER  IV 

THE  GOVERNMENT  OF  MEXICO:     ELECTIONS 

TRACING  the  details  of  Mexican  politics  before  the 
Diaz  regime  gives  no  picture  of  principles  or  system. 
Each  triumph  announced  is  followed  at  a  short  interval 
by  what  appears  to  be  the  overthrow  of  all  the  triumph 
stood  for.  ]NTor  indeed  did  the  government,  which 
brought  peace  in  the  late  '70s,  mean  triumph  of  prin- 
ciple. Of  the  principles  for  which  it  stood — no  reelec- 
tion and  free  suffrage — one  was  overthrown  by  the 
leader  who  proclaimed  it  and  the  other  never  was  given 
a  trial.  There  was  established  a  system  of  government 
that  brought  peace,  freedom  from  pillage  in  the  name 
of  the  people,  and  at  least  a  greater  measure  of  freedom 
for  the  economic  development  of  the  country,  but  the 
political  ideals  of  the  revolution  were  brushed  aside  and 
ignored. 

How  Mexico  came  to  the  belief  that  peace  at  any 
price  was  the  first  need  of  the  republic  is  the  theme  of  a 
great  part  of  its  early  history.  In  the  generation  fol- 
lowing the  revolution  against  Spain  the  contests  had 
been  between  the  Conservatives,  or  supporters  of  the 
church,  and  the  Liberals.  These  were  divisions  on  prin- 
ciple but  ones  in  which  the  conflicts  of  opinion  were 
settled,  as  a  rule,  by  violence  and  not  by  appeal  to  the 
ballot.  At  the  restoration  of  the  republic  in  1867,  the 
French  intervention  having  come  to  an  end,  the  Liberal 

42 


MEXICAN  ELECTIONS  43 

party  was  completely  victorious.  Its  opponents  have 
never  recovered  their  prestige,  nor  indeed  have  they 
even  attempted  actively  to  enter  political  life.  Juarez 
was  elected  President  on  the  prestige  of  his  leadership 
against  the  Conservatives  and  the  European  interven- 
tion. There  was  practically  no  opposition.  A  large 
minority  of  the  people  constituting  the  Conservative 
party  had  eliminated  itself  as  a  political  factor. 

At  the  next  election  the  single  group  that  was  left 
divided  into  the  supporters  of  President  Juarez,  Lerdo, 
and  Diaz.  The  discord  that  had  formerly  existed  be- 
tween the  parties  invaded  the  organization  of  the  Lib- 
erals. Even  the  general  participation  of  the  Liberal 
party  in  politics  was  soon  to  disappear.  In  the  election 
Juarez  was  again  declared  President.  Diaz  appealed 
to  arms  in  the  so-called  revolution  of  La  Noria.  With 
the  revolution  still  in  progress  Juarez  died.  Lerdo,  in 
accordance  with  the  law,  succeeded  and  later  was  elected 
without  contest — and  with  very  little  popular  participa- 
tion. The  Liberal  party,  so  far  as  it  had  vitality,  was 
breaking  down. 

In  the  election  of  1876  Lerdo  again  declared  himself  a 
candidate.  Diaz  announced  that  an  election  would  be  a 
farce  since  Lerdo  controlled  the  election  machinery. 
His  supporters  took  no  part  in  the  election  but  started 
the  revolution  of  Tuxtepec  on  the  platform  "no  reelec- 
tion and  free  suffrage."  The  Lerdistas  held  their  elec- 
tion in  July,  armed  opposition  being  in  full  swing  and 
the  Conservatives  not  voting.  The  revolution  headed 
by  Diaz  was  successful  and  its  leader  ordered  a  new 
election  for  President  and  members  of  the  supreme 


44    MEXICO  AND  ITS  RECONSTRUCTION 

court  early  in  1877.  In  this  only  the  Diaz  men  voted. 
The  other  branches  of  the  Liberal  party  and  the  Con- 
servatives abstained.  The  election  of  Congress  the  fol- 
lowing year  showed  no  more  vitality. 

The  new  system  of  Mexican  politics  had  been  ushered 
in.  It  was  a  brave  show  of  popular  government  but 
one  in  which  the  people  had  no  real  part  and  took  no 
real  interest.  It  was  not  even  a  true  contest  among  the 
upper  class.  It  was  a  procession  only,  not,  in  fact,  a 
struggle  in  which  high  aspirations  were  announced  by 
rival  candidates  for  the  approval  of  the  multitude  but 
a  sham  display  in  which  decisions  already  taken  were 
confirmed.  From  1877  to  the  end  of  the  Diaz  regime 
elections  in  Mexico  were  not  functions  reflecting  na- 
tional opinion  but  ceremonies  consecrating  the  estab- 
lished order. 

It  is  wrong  to  suppose  that  the  succeeding  elections 
in  Mexico  all  rested  on  active  general  display  of  force. 
They  did  not,  nor  was  comment  in  the  press  at  an  end. 
The  criticisms  of  the  government  in  the  opposition  pa- 
pers were  often  lurid.  Mexican  journalism  is  nothing  if 
not  colorful.  But  active  repressive  measures  were  un- 
necessary as  a  rule  because  there  was  no  active  opposi- 
tion. Peace  had  come,  a  peace  that,  laying  its  strong 
hand  upon  the  people,  took  away  from  them  the  right  of 
self-government,  which  they  had  used  only  to  abuse  it. 
Peace  had  come  to  bring  to  the  country  the  longed  for 
economic  development  that  might  make  Mexico  one 
of  the  leading  countries  of  the  New  World.  Pity  that 
the  peace  that  came  to  Mexico  had  not  also  within  the 
folds  of  its  garments  that  uplift  for  the  Mexican  people 


MEXICAN  ELECTIONS  45 

that  would  have  made  them  capable  of  solving  by  peace- 
ful methods  the  very  problems  that  peace  and  material 
development  left  at  their  door! 

The  election  of  1882  illustrates  the  conditions  at  the 
beginning  of  the  new  regime.  There  were  no  true  party 
organizations,  practically  no  public  gatherings,  and  little 
discussion  of  candidates  or  issues  in  the  press.  There 
were  no  nominating  conventions.  The  candidates  were 
chosen  in  private  juntas  of  very  select  character.  High 
flown  editorials  appeared  concerning  the  solemnity  of 
the  electoral  function  but  even  the  date  of  the  election 
passed  almost  unnoticed  and  the  announcement  of  the 
result  was  not  of  sufficient  public  interest  to  receive  more 
than  casual  mention.1  Even  the  solemn  public  show  of 
compliance  with  constitutional  formulas,  which  charac- 
terized the  later  "elections,"  was  not  observed.  Mexican 
leaders  seemed  to  have  tired  of  factional  struggles  and 
were  willing  to  let  the  government  in  power  rule — if  it 
could  assure  peace. 

By  its  organization  the  electoral  system  in  force  con- 
tributed to  make  it  easy  to  impose  the  will  of  the  party 
in  power.  It  was  so  complicated  that  it  obscured  the 

1 A  good  description  of  political  conditions  during  the  election 
of  1882  is  found  in  the  Nation,  vol.  34,  p.  399,  May  11,  1882,  and 
the  Nation,  vol.  35,  p.  198,  September  7,  1882.  These  articles 
discuss  the  conditions  under  Gonzalez.  The  conditions  surrounding 
earlier  elections  are  described  in  Papers  Relating  to  the  Foreign 
Relations  of  the  United  States,  1878,  p.  567  et  seq.  Later  elections 
are  described  in  Alfred  Bishop  Mason,  "The  Cause  of  Revolution 
in  Mexico,"  Unpopular  Review,  vol.  3,  April,  1915,  and  Henry 
Lane  Wilson,  "Madero's  Failure,"  Annals  of  the  American  Academy 
of  Political  and  Social  Sciencce,  vol.  54,  p.  148  et  seq,  July,  1914, 
discussing  the  government  control  of  elections  under  Madero. 


46    MEXICO  AND  ITS  RECONSTRUCTION 

result  of  any  development  of  popular  opinion.2  While 
a  system  in  some  respects  similar  has  resulted  in  the 
United  States  in  an  approach  to  direct  popular  control 
through  the  creation  of  agencies  which,  while  keeping 
the  form  of  the  constitutional  provisions,  changed  their 
spirit,  in  Mexico  the  indirect  system  enabled  the  execu- 
tive to  destroy  all  popular  control. 

The  various  states  were  divided  into  electoral  dis- 
tricts of  40,000  inhabitants.  These  in  turn  were  divided 
into  sections  of  500  inhabitants.  Every  alternate  June 
the  people  of  a  section  chose  an  "elector."  The  electors 
assembled  in  July  to  vote  for  one  Congressman  for  each 
district  and  two  Senators  for  each  state.  Every  fourth 
year  they  voted  also  for  the  President.  The  result  of 
the  voting  of  the  electors  was  canvassed  by  the  Congress 
in  the  case  of  the  Congressmen  and  the  President,  and 
by  the  State  legislatures  in  the  case  of  the  Senators.3 

The  state  elections,  also  based  on  popular  vote,  oc- 
curred simultaneously  with  the  choice  of  the  federal 
officers  but  aroused  no  more  popular  interest.  The  state 
officers  were  regularly  supporters  of  the  government 
who  lived  in  the  state  capital,  though  representing,  in 
the  case  of  legislative  officers,  outlying  districts  in  which 
they  were  often  very  little  known.  Often  the  members 
of  the  state  legislature  might  also  be  executive  officers. 

Besides  this  practice  of  allowing  an  individual  to  hold 

2  Papers  Relating  to  the  Foreign  Relations  of  the  United  States, 
1878,  p.  567  et  seq. 

3  Various   amendments   were  introduced  before   the   end  of  the 
Diaz  regime,  but  the  general  character  of  indirect  choice  was  not 
affected  thereby. 


MEXICAN  ELECTIONS  47 

executive  and  legislative  positions  at  the  same  time, 
there  grew  up  the  custom  of  divorcing  representation 
from  even  the  requirement  of  a  nominal  residence  in  the 
district  represented.  This  was  true  in  both  the  state  and 
central  governments.  The  law  required  that  mem- 
bers of  Congress  should  be  citizens  and  residents  of  the 
districts  represented.  Nevertheless  it  frequently  hap- 
pened that  those  elected  were  neither,  and  in  some  cases 
had  never  even  been  physically  within  the  district  from 
which  they  were  "elected."  Curious  situations  arose 
thus.  In  1878  one  of  the  prominent  members  of  Con- 
gress was  elected  from  a  district  in  his  native  state  but 
not  that  of  his  residence.  He  was  also  chosen  from  a 
district  in  another  state.  As  he  was  at  outs  with  the 
local  governor  he  accepted  the  election  in  the  second. 
At  the  next  election  he  was  chosen  Senator  from  a  still 
different  state  and  seated. 

These  practices  continued  throughout  the  Diaz  re- 
gime. In  1904  three  states  were  represented  in  Con- 
gress by  Senators  and  deputies  none  of  whom  had  ever 
resided  in  their  districts  and  only  two  or  three  of  whom 
had  ever  been  in  the  states  they  represented.*  Actual 
residence,  even  when  claimed,  was,  in  fact,  often  nom- 
inal since  the  real  abode  of  many  of  the  representatives 
was  regularly  the  capital — the  attractions  of  which  made 
life  in  the  provincial  towns  seem  dull. 

As  the  Diaz  period  progressed  the  elections  became 
more  important  events  in  the  national  life.  They  were 
given  greater  publicity  and  attracted  more  popular  at- 
tention. Nevertheless  they  did  not  represent  a  clash  be- 

*  Nation,  vol.  79,  p.  194,  September  8,  1904. 


48    MEXICO  AND  ITS  RECONSTRUCTION 

tween  two  great  political  parties  nor  a  free-for-all  con- 
test between  a  number  of  groups.  There  was  no  po- 
litical organization  such  as  is  characteristic  in  Anglo- 
Saxon  countries  and  in  continental  Europe. 

The  election  of  June,  1904,  illustrated  the  smooth 
working  of  republican  government  of  the  type  the  Diaz 
administrations  created.  Election  boards  were  chosen 
in  strict  accordance  with  the  letter  of  the  law  and  polling 
places  were  specified.  In  the  campaign  period  there 
were  "spontaneous  demonstrations  of  the  masses"  an- 
nounced by  government  papers.  Small  crowds  gath- 
ered at  political  speeches  to  enjoy  the  music  that  was 
furnished  and  to  be  thrilled  by  oratorical  appeals  to 
general  principles.  On  election  day  there  was  little 
real  public  interest  evident.  When  the  votes,  which  in 
most  districts  were  few,  were  counted,  the  candidates 
who  had  been  announced  as  having  the  support  of  the 
government  were  found  elected.  They  had  had  little 
opposition,  indeed  they  generally  had  no  opponents. 

The  election  over,  the  work  of  the  various  electoral 
colleges  proceeded  with  all  due  ceremony.  The  follow- 
ing summary  is  based  on  the  official  proceedings  of  one 
such  body  as  published  in  the  official  Gazette  of  the 
State:6 

At  the  first  meeting,  the  jefe  politico,  or  governor,  of  the 
district  presided,  until  the  meeting,  composed  of  sixty-odd 
electors,  had  chosen  its  officers,  after  which  he  withdrew  and 
the  meeting  adjourned  for  the  day.  At  the  second  meeting, 
the  "credentials"  of  the  members  elected  .  .  .  were  all  pro- 

5  The  facts  concerning  the  elections  of  1904  are  taken  from  the 
Nation,  vol.  79,  p.  194,  September  8,  1904. 


MEXICAN  ELECTIONS  49 

claimed  correct,  and  the  meeting  adjourned.  At  the  third 
•meeting,  a  Deputy  for  that  District  and  a  Senator  for  the 
State  were  chosen,  by  unanimous  vote,  together  with  a  substi- 
tute for  each.  The  fourth  meeting  brought  out  the  vote  for 
President  and  Vice  President.  Diaz  was  unanimously  chosen, 
after  which  a  telegram  of  congratulations  was  sent  to  him,  and 
felicitations  were  exchanged  with  the  Governor  of  the  State 
during  an  informal  recess ;  then  Corral  was  voted  upon  for  Vice 
President,  receiving  50  of  the  total  of  66  votes,  the  rest  being 
a  few  scattering  expressions  of  individual  choice.  At  the  last 
meeting  the  two  justices  of  the  Supreme  Court  .  .  .  received 
formal  approbation.  Thus,  five  days,  with  sessions  of  an  hour 
or  less  each,  were  consumed  in  the  process. 

By  this  time  repression  of  public  discussion  in  the 
spoken  word  or  in  the  newspapers  had  almost  disap- 
peared.8 The  dictator  in  the  latter  part  of  his  regime 
is  said  to  have  welcomed  criticism  so  long  as  it  did  not 
touch  himself.  Whether  this  was  done  from  desire  to 
promote  the  development  of  true  parties,  which  might 
later  become  responsible  agents  for  carrying  on  the  gov- 
ernment, or  as  a  means  to  provide  a  safety  valve  for  in- 
creasing public  opinion  is  not  clear.  There  was,  how- 
ever, no  group  of  thinkers  that  announced  a  platform 
of  real  reform.  The  opposition  press  was  no  more  con- 
structive in  policy  than  that  which  supported  the  gov- 

8  The  control  over  the  casting  and  counting  of  votes,  however, 
was  not  lessened  and  extreme  measures  were  taken  when  an  election 
threatened  to  become  more  than  a  formality.  See  an  interesting 
discussion  of  widespread  arrests  and  other  corrupt  practices  em- 
ployed to  control  the  Diaz-Madero  election,  in  Dolores  Butterfield, 
"The  Situation  in  Mexico,"  North  American  Review,  vol.  196  p. 
649,  November,  1913. 


50    MEXICO  AND  ITS  RECONSTRUCTION 

eminent.  The  statements  of  the  papers  presented  the 
most  amazing  contradictions.  The  work  of  the  reporter 
and  of  the  newspaper  in  the  elections  too  often  were  in- 
terpreted not  as  involving  a  duty  to  report  the  facts 
but  as  an  opportunity  to  damage  the  candidate  opposed 
by  misstatement  and  invective. 

The  degree  to  which  popular  government  did  not 
exist  in  Mexico  in  the  old  regime  may  be  judged  by  the 
number  of  votes  actually  cast  for  the  Presidential  can- 
didate. Going  back  before  the  Diaz  regime  we  find 
the  votes  at  the  second  election  of  Juarez  to  number 
12,361  in  a  reported  population  of  8,836,000.  Lerdo 
was  chosen  in  1872  by  10,465  votes  with  less  than  1,000 
in  opposition.  The  control  of  the  government  in  1876 
was  determined  by  revolution.  In  1880,  11,528  votes 
were  cast  for  Gonzalez  with  a  scattering  opposition.7 
Popular  interest  did  not  rise  even  with  the  establishment 
of  peace.  Throughout  the  Diaz  regime  there  continued 
the  apathy  on  the  part  of  the  general  electorate  which 
must  be  shaken  off  before  Mexico  can  lay  any  claim  to 
being  a  representative  or  popular  government. 

Since  the  passing  of  the  old  regime  no  issue  has  been 
presented  to  the  people  under  conditions  that  would  en- 
courage a  free  expression  of  popular  opinion.  The  pri- 
vate instructions  sent  out  for  the  Huerta  election  in 
1913,  which  was  the  veriest  farce,  showed  on  their  face 
the  desire  to  preserve  an  apparent  respect  for  popular 
will  and  to  assure  that  it  should  be  defeated. 

Political  parties  and  citizens  were  to  be  "given  full 
freedom  in  the  polls  which  may  operate,  allowing  them 

7  Figures  cited  in  the  Nation,  vol.  34,  p.  399,  May  11,  1882. 


MEXICAN  ELECTIONS  51 

to  make  all  kinds  of  protests,  providing  they  refer  to 
votes  in  favor  of  any  of  the  candidates  appearing  before 
the  people"  and  those  who  were  chosen  to  manage  the 
polls  were  to  be  persons  who  would  "inspire  absolute 
confidence"  and  who  were  "well  versed  in  the  electoral 
law." 

The  private  instructions  sent  out  provided,  it  is  re- 
ported, that  the  persons  in  charge  of  the  polls  were  to 
be  "absolutely  reliable,  so  that  they  may  follow  the  in- 
structions given  to  them."  It  was  planned  to  prevent, 
where  possible,  the  election  in  two-thirds  plus  one  of 
the  polls  in  each  district,  to  make  the  choice  void.  In 
all  the  polls  that  did  operate  blank  tickets  were  to  "be 
made  use  of  in  order  that  the  absolute  majority  of  the 
votes  may  be  cast  in  favor  of  General  Huerta  .  .  ."  and 
if  these  means  failed  the  returning  officers  were  to  fal- 
sify the  result.8 

The  government  recognized  in  the  election  of  1917 
that  the  executive  influence  exercised  in  the  elections 
of  the  old  regime  did  not  square  with  true  democratic 
standards  and  announced  its  intention  to  have  the  voting 
unaffected  by  official  pressure.  First  Chief  Carranza 
announced  that  the  reports  that  some  of  the  candidates 
for  governorships  were  official  candidates  were  un- 
founded. He  declared  "the  Constitutional  government, 
which  I  have  the  honor  to  represent,  will  not  sustain  or 
protect  any  popular  candidate  whatsoever.  ...  In  vir- 
tue of  this  in  some  of  the  States,  where  the  provisional 

8  This  interesting  set  of  directions,  dated  October  22,  1913,  is 
published  in  the  Congressional  Record,  vol.  51,  part  9,  p.  8517, 
May,  1914. 


§2    MEXICO  AND  ITS  RECONSTRUCTION 

governors  have  placed  their  influence  in  favor  of  certain 
candidates,  they  have  been  removed,  so  that  the  will 
of  the  people  shall  not  be  trampled  upon."  9  Whether 
the  election  was  free  in  fact  is  disputed.  The  opponents 
of  the  government  alleged  that  the  announcement  that 
the  election  was  free  was  made  only  to  strengthen  the 
government  in  the  opinion  of  foreign  nations. 

It  seems  clear  that  in  some  sections  at  least  the  elec- 
tion of  1917  did  awaken  a  greater  interest  in  public  af- 
fairs, and  resulted  in  more  voluntary  voting.  In  some 
cities  activity  in  the  election  appears  to  have  produced 
spirited  contests,10  but  these  seem  to  have  been  gener- 
ally the  result  of  enthusiasm  in  support  of  rival  candi- 
dates within  the  same  party  and  not  of  a  true 
inter-party  clash.  In  Mexico  City  there  were  over  600 
candidates  for  the  24  positions  to  be  filled — a  fact  which 
in  itself  shows  scattered  enthusiasm  rather  than  good 
political  organization.  The  official  Congressional  can- 
vass showed  797,305  votes  cast  for  Carranza,  11,615 
for  Gonzalez,  4,000  for  Obregon,  and  a  number  of  scat- 
tering ballots  for  other  candidates.11  On  the  evidence 
available  it  appears  clear  that  the  election  of  1917  was 

9  Mexican  Review,  vol.  1,  No.  9,  Washington,  June,  1917.     The 
announcement  was   dated  at  the  National  Palace,  Mexico,  April 
7,  1917. 

10  A  description  of  this  election  is  found  in  the  semi-official  Mexi- 
can Review,  Washington,  vol.    1,   No.   8,   May,    1917.      See   also 
Arthur  Ruhl,  "Mexico's  First  Real  Election,"   Collier't,  vol.   48, 
No.  7,  p.  19,  November  4,  1911. 

""•Mexican  Review,  vol  1,  No.  9,  Washington,  June,  1917,  p.  8. 
A  table  is  included  showing  the  votes  by  states.  See  also  Bulletins 
of  the  Mexican  News  Bureau,  June  19  and  21,  1917. 


MEXICAN  ELECTIONS  53 

less  affected  by  official  influence  than  those  of  the  old 
regime.  There  was  greater  popular  enthusiasm  and 
the  largest  vote  in  the  history  of  the  republic  was  cast. 

On  the  other  hand,  the  circumstances  surrounding 
the  election  were  so  exceptional  that  the  returns  can- 
not properly  be  taken  as  indicative  of  what  may  be  ex- 
pected in  the  average  case.  The  choice  occurred  shortly 
after  a  successful  revolution,  when  a  widespread  oppo- 
sition could  hardly  be  expected.  This  was  the  first 
election  in  which  the  Mexican  people  voted  under  the 
new  constitution  providing  for  a  direct  vote  for  the 
President,  a  change  which  in  itself  would  encourage  a 
heavier  poll.  The  desire  of  the  administration  to  make 
a  good  showing  naturally  made  its  supporters  anxious 
to  get  the  voters  to  the  polls.  The  opposition  did  not 
vote.  Many  of  its  leaders  were  in  exile.  The  govern- 
ment could  have  made  the  vote  larger  doubtless  if  it  had 
wished,  just  as  the  Diaz  government  could  have  in- 
creased or  decreased  the  polling  if  it  had  been  felt  worth 
while.  The  lack  of  secrecy  of  the  ballot,  especially 
among  a  population  so  largely  illiterate,  is  another  fac- 
tor that  makes  the  result  doubtful  as  a  reflection  of  the 
popular  will. 

Events  after  the  election  of  1917  have  not  been  en- 
couraging for  those  who  hope  for  the  early  develop- 
ment of  popular  elections  in  Mexico.  The  violent  death 
of  President  Carranza  followed,  after  the  provisional 
Presidency  of  de  la  Huerta,  by  the  unopposed  election 
of  Obregon  in  August,  1920,  does  not  show  that  a  new 
era  in  Mexican  politics  is  at  hand. 

The  most  unsatisfactory  feature  of  these  elections  is 


54    MEXICO  AND  ITS  RECONSTRUCTION 

their  unanimity.  No  nation  of  15,000,000  people  vot- 
ing under  normal  conditions  shows  such  community  of 
opinion.  There  was  not  before  the  revolution  and  there 
is  not  now  in  Mexico  a  vigorous  party  organization  that 
brings  a  clear-cut  clash  on  candidates  and  policies.  The 
test  of  the  Mexican  people  as  a  voting  body  lies  not  in 
the  elections  of  1917  and  1920  but  in  the  elections  to 
come,  when  the  personal  ambitions  and  differences  of 
opinion  of  the  various  leaders  have  free  play.  There 
may  then  arise  the  old  personalism  that  has  been  the 
fatal  element  in  Mexican  politics.  The  mutterings  of 
discontent  already  beginning  to  be  heard  may  make 
applicable  again  the  lament  of  a  member  of  the  Su- 
preme Court  who,  over  a  generation  ago,  declared : 12 

We  have  frequently  asked  ourselves  what  the  divisions  of  the 
Liberal  party  in  Mexico  signify.  Proclaiming  the  same  prin- 
ciples, entertaining  the  same  aspirations,  united  in  the  same 
history  of  abnegation  and  sacrifices  .  .  .  the  numerous  mem- 
bers of  this  great  family  have  separated  .  .  .  when  they  should 
.  .  .  combine  their  efforts  and  unitedly  advance  to  the  attain- 
ment of  a  great  object,  the  progress  and  prosperity  of  the 
country.  .  .  . 

Many  times,  we  have  asked  ourselves,  is  reconciliation  among 
the  different  members  of  the  republican  family  possible?  .  .  . 
And  in  case  of  the  absence  of  sufficient  abnegation  for  the  con- 
summation of  so  meritorious  a  work,  what  is  the  fate  which 
awaits,  not  merely  a  certain  political  organization,  but  the 
country  disunited,  debilitated,  impotent  to  control  the  disorder 
which  consumes  it  ...  ?  If  the  contentions  of  personal  fac- 

12  I.  M.  Vigil  in  Monitor  Republlcano,  August  7,  1878,  article 
quoted  in  Papers  Relating  to  the  Foreign  Relations  of  the  United 
States,  1878,  p.  571. 


MEXICAN  ELECTIONS  55 

tions  are  to  continue  as  up  to  the  present,  ...  it  will  neither 
be  possible  to  establish  a  durable  government  nor  to  restrain 
crime  which,  under  a  thousand  forms,  may  invade  society,  the 
country  being  condemned  as  it  seems  to  inevitable  dissolution. 

One  cannot  study  the  political  history  of  Mexico 
without  reaching  the  conviction  that  the  political  leaders 
have  not  faced  the  facts  with  which  they  have  had  to 
deal.  There  has  never  been  a  determined  and  united 
effort  to  raise  the  people  to  that  status  in  which  true 
enthusiasm  and  ability  for  self-government  is  born. 
The  better  educated  have  made  sporadic  efforts  to  do 
so  but  those  efforts  have  broken  down  almost  as  soon 
as  made.  Great  advance  has  occurred  in  economic  lines 
through  the  cooperation  of  the  foreigner.  Mexicans 
have  not  had  cooperation  from  outside  the  country  in 
political  affairs  and  have  indicated  their  unwillingness 
to  accept  it.  If  Mexico  is  to  work  out  her  own  political 
salvation,  as  all  her  friends  hope  she  may,  a  great 
responsibility  rests  on  that  small  class  which,  by  its 
wealth,  social  position,  and  education,  is  free  from  the 
limitations  that  surround  the  electorate  as  a  whole. 
Orderly  government  has  heretofore  meant  one-man  rule 
in  Mexico.  That  basis  must  be  broadened,  to  include 
de  jure  and  de  facto  at  least  those  who,  by  education 
and  experience,  have  the  intellectual  equipment  for  self- 
government. 

Before  those  to  whom  Mexico  has  given  advantages 
lies  this  opportunity  for  patriotic  service  and  upon  them 
rests  the  responsibility  of  learning  the  lesson  of  cooper- 
ation— cooperation  with  those  of  like  and  of  unlike  polit- 
ical faiths.  They  must  lead  their  country  and  must 


56    MEXICO  AND  ITS  RECONSTRUCTION 

govern  it,  they  must  prepare  the  common  people  of 
Mexico  to  discharge  the  duties  of  self-government, 
which  a  century  of  experience  has  shown  they  do  not 
yet  possess. 

The  failing  of  Mexican  statesmen  in  the  past  has 
been  the  one  that  has  beset  Latin  American  countries 
generally  from  the  day  of  their  independence.  They 
have  not  realized  that  true  ability  for  self-government 
on  the  part  of  the  people  at  large  comes  with  the  slow 
growth  of  national  ideals  and  the  gradual  adjustment 
to  more  advanced  standards  of  political  thinking  and 
action.  The  constitution  makers  have  placed  their  faith 
in  forms  of  government.  They  have  overlooked  the 
fact  that  high  sounding  phrases  cannot  at  a  stroke 
endow  a  people  who  have  never  enjoyed  self-govern- 
ment, and  who  are  without  experience,  therefore,  in  its 
exercise  and  without  the  critical  public  opinion  on  which 
it  must  rest,  with  the  ability  to  cast  off  the  past  like  a 
cloak  and  start  anew. 

This  is  the  fundamental  truth  that  makes  all  the 
detailed  comparisons  of  the  old  and  new  constitutions 
carried  on  in  and  out  of  Mexico  futile.  The  old  con- 
stitution did  not  fit  the  facts.  The  new  constitution 
does  not  do  so.  The  people  of  Mexico  will  never  truly 
rule  themselves  until  the  day  when  by  evolution  through 
education,  industry,  and  habits  of  political  association 
they  fit  themselves  to  do  so.13  Unfortunately  the  adop- 

13  The  political  organization  considered  practical  by  the  advanced 
revolutionary  leaders  is  discussed  by  V.  Carranza  in  his  "Report 
to  Constitutional  Congress  at  Queretaro,"  December  1,  1916,  New 
York,  Latin  American  News  Association  (pamphlet). 


MEXICAN  ELECTIONS  57 

tion  of  no  constitution  alone  will  give  them  that  endow- 
ment. Till  this  slow  development  is  under  way  political 
power  will  rest  in  the  hands  of  some  new  Diaz  or  in 
the  hands  of  a  small  but  widening  group,  which,  with 
or  without  foreign  aid,  will  undertake  to  prepare  the 
people  for  responsibilities  of  self-government. 


CHAPTER  V 

THE  GOVERNMENT  OF  MEXICO:  THE  STATE  AND 
LOCAL  GOVERNMENTS 

THE  constitutions  of  Mexico  have  attempted  to  set 
up  states  with  a  sphere  of  action  in  large  degree  similar 
to  that  of  the  states  in  the  United  States  but  the  sys- 
tem has  never  taken  root.  There  has  never  been  a  vig- 
orous system  of  local  self-government.  Public  opinion, 
here  as  in  the  central  government,  has  been  inactive  and 
unorganized.  The  absorption  of  functions  by  the  cen- 
tral government  left  the  localities  little  to  do.  The 
choice  of  local  officials  in  the  elections  was  seldom  more 
free  from  the  influence  of  the  central  executive  power 
than  was  the  selection  of  members  of  Congress  and  the 
same  influence  exerted  after  the  elections  made  the  de- 
liberations of  local  bodies  trivial.  They  did  not  have 
sufficient  freedom  of  action,  nor  sufficient  command  of 
funds  to  put  through  the  legislation  needed  by  their 
localities  or  to  arouse  public  interest  in  their  pro- 
ceedings. 

Most  of  the  state  legislatures  consisted  of  a  single 
house  of  from  12  to  30  members.  Their  sessions  under 
the  old  regime  were  normally  two  per  year,  each  lasting 
nominally  three  months.  On  the  days  when  the  houses 
met,  the  sessions  were  ordinarily  limited  to  two  hours. 
Their  proceedings  were  often  brilliant,  and  the  members 
were  often  exceptionally  able  parliamentarians.  When 

58 


LOCAL  GOVERNMENT  59 

the  legislature  was  not  in  session,  it  was  represented  by 
a  permanent  deputation  whose  announced  function  was 
to  protect  the  rights  of  the  legislature  from  encroach- 
ment by  the  executive. 

Public  revenues  could  be  increased  only  with  great 
difficulty  in  most  of  the  states.  The  central  govern- 
ment monopolized  the  customs  duties  as  a  matter  of 
course.  Since  the  industrial  development  of  the  coun- 
try was  small,  the  states  had  in  their  power  to  tax  local 
developments,  a  less  valuable  resource  than  in  better  de- 
veloped lands.  The  desire  of  the  states  and  that  of  the 
national  government  would  naturally  be  to  burden  en- 
terprise as  little  as  possible  in  order  to  encourage  the 
entry  of  capital.  Thus  they  hoped  to  create  greater 
local  wealth,  raise  the  national  standard  of  life  and  in- 
crease the  ability  of  the  government  to  collect  greater 
amounts  in  taxes  without  checking  the  advance  of  the 
country. 

The  taxing  system  actually  in  use  had  its  origin  in 
the  system  developed  in  Latin  countries  long  before  the 
period  of  independence.  With  some  exceptions  the  rate 
of  levy  was  low.  There  was  in  all  the  states,  except 
Yucatan,  a  general  tax  on  property,  usually  reckoned 
on  a  percentage  of  value  officially  determined  for  dif- 
ferent classes  of  real  estate.  Taxes  on  industry  and 
commerce  were  general  throughout  the  republic.  Both 
these  levies  are  alleged  to  be  based  on  practice  intro- 
duced into  Spain  through  the  Roman  law.  There  was 
a  tax  on  professions,  called  the  patente,  drawn  on  the 
model  of  a  French  tax  instituted  in  1791.  Consump- 
tion taxes  on  various  articles  were  collected,  familiar  in 


60    MEXICO  AND  ITS  RECONSTRUCTION 

the  colonial  period  as  the  alcabala.  When  formally 
abolished,  these  were,  in  later  Mexican  history,  substi- 
tuted by  municipal  duties  and  an  increase  in  the  quotas 
of  other  state  taxes.  Some  states  had  poll  taxes  or  taxes 
on  all  persons  over  14  years  of  age.  They  were  not  an 
important  source  of  income.1  Besides  these  there  were 
a  large  number  of  other  sources  of  revenue,  few  of 
which  gave  important  yields,  many  of  which  were  sur- 
vivals, and  some  of  which  were  merely  curious.  How 
weak  the  state  governments  were  financially  may  be 
illustrated  by  the  fact  that  for  the  government  of  the 
great  area  of  the  State  of  Chihuahua  there  was  col- 
lected even  as  late  as  1907  only  $1,307,489  Mexican,  an 
amount  that  was  even  less  than  it  appears,  for  the  ser- 
vices performed  by  the  municipalities  in  many  other 
countries  are  largely  performed  by  the  state  in  Mexico.2 
Weak  as  the  state  governments  were,  they  were 
much  stronger  than  those  of  the  municipalities.  In 
fact  just  as  the  central  government  absorbed  the  func- 
tions of  the  states,  these  in  turn  took  over  municipal  ser- 
vices. No  feature  of  Mexican  public  life  shows  more 
clearly  the  lack  of  real  self-government  in  the  republic 
than  the  condition  of  the  cities  and  towns  during  the 
Diaz  regime.  It  is  almost  axiomatic  that  where  a  vig- 
orous local  public  life  is  found  there  is  good  soil  for  the 
growth  of  self-governing  institutions,  the  foundation 

1  M emoria  de  hacienda  y  credito  publico  .  .  .  1  de  Julio  de  1910 
a  30  de  Junto  de  1911,  tomo  2,  Mexico,  1912,  p.  657  et  seq. 

2  Memoria  de  hacienda  y  credito  publico  .  .  .  1  de  Julio  de  1909 
a  30  de  Junio  de  1910,  Mexico,  1Q10,  p.  719-     This  document  con- 
tains  an  excellent  analysis  showing  the  various  sources  of  state 
funds. 


LOCAL  GOVERNMENT  61 

upon  which  a  strong  and  effective  public  opinion  and 
public  authority  may  be  raised.  Mexico  has  never  en- 
joyed that  blessing. 

Local  government,  as  a  result,  lacked  reality  and 
seriousness;  it  was  not  a  vital  part  of  the  life  of  the  com- 
munity. Democracy  was  dead  at  the  root.  Town  feel- 
ing became  sentimental  not  fundamental.  The  most 
evident  and  often  the  most  important  work  done  by  the 
local  government  was  the  furnishing  of  entertainments, 
such  as  band  concerts  and  the  maintenance  of  a  munic- 
ipal theater.  Financial  difficulties  brought  it  about  that 
the  water  supplies  of  the  larger  towns,  with  the  excep- 
tion of  that  of  the  capital,  as  a  rule,  were  put  in  by  the 
state  governments  which  kept  a  control  over  the  rental 
charges  so  as  to  be  able  to  pay  for  the  expenditure.  In 
some  cases  the  apathy  of  the  local  population  toward 
their  own  interests  forced  the  adoption  of  control  by  the 
larger  units  if  certain  services  were  to  be  performed  in 
more  than  a  farcical  manner.  In  Jalisco,  for  example, 
the  state  government  found  itself  under  the  necessity 
of  administering  the  schools  and  poor  relief  because  the 
local  government  was  too  weak  to  do  so.3  The  states  of 

3  A  good  criticism  of  Mexican  local  government  is  found  in  L.  S. 
Howe,  "Notes  on  Municipal  Government,"  Annals  of  the  American 
Academy  of  Political  and  Social  Science,  vol.  21,  p.  532,  December, 
1903.  See  also  C.  W.  Dabney,  "A  Star  of  Hope  for  Mexico,"  New 
York,  Latin  American  News  Association  (pamphlet).  The  reasons 
for  the  decay  of  the  municipal  government  system  introduced  by 
the  Spaniards  and  of  the  local  government  that  the  Indian  com- 
munities had  developed  are  outlined  in  T.  Esquivel  Obregon,  ln~ 
fluencia  de  Espana  y  los  Estados  Unidos  sobre  Mexico,  Madrid, 
1918,  pp.  213-226. 


62    MEXICO  AND  ITS  RECONSTRUCTION 

Durango  and  Michoacan,  at  the  end  of  the  first  century 
of  independence,  did  not  collect  any  municipal  taxes.* 

There  was  little  freedom  of  action  allowed  the  cities. 
Their  small  budgets  had  to  be  submitted  to  state  author- 
ities for  approval  before  they  could  go  into  effect.  In 
most  states  the  same  was  true  of  all  the  more  important 
municipal  decisions  even  if  not  of  a  fiscal  nature. 

There  were  some  variations  in  local  government  but 
the  municipality  had  no  wide  range  of  organization  such 
as  we  are  familiar  with  in  the  United  States.  The  ayun- 
tamiento,  or  town  council,  was  elected  by  an  indirect  sys- 
tem. The  people  voted  for  electors  who  in  turn  chose 
the  councilmen.  The  powers  of  the  council  were  largely 
deliberative.  The  real  executive  officers  were  not  under 
its  direction  or  control.  The  municipalities  regularly 
had  but  small  power  to  raise  money.  They  could  not 
undertake  important  public  works. 

The  general  character  of  their  income  may  be  illus- 
trated by  the  list  of  taxes  levied  in  the  municipalities  of 
the  State  of  Aguascalientes  at  the  end  of  the  first  cen- 
tury of  Mexican  independence.  It  comprised  levies  on 
irrigation,  public  amusements,  slaughterhouses,  stables, 
vehicles,  professional  licenses,  weights  and  measures, 
rentals,  on  fattening  hogs,  bandstands,  pawnshops, 
buildings  in  construction,  restaurants,  stands  or  chests 
in  the  portals  of  churches,  gambling  places,  warehouses, 
saloons,  lotteries,  firearms,  traveling  salesmen,  checks, 
and  certain  classes  of  peddlers.5  Some  of  these  branches 

*  Memoria  de  hacienda  y  credito  publico  .    .    .  1  de  Julio  de  1910 
a  30  de  Junto  de  1911,  tomo  2,  Mexico,  1Q12,  pp.  216-23. 
6  Ibid.,  p.  221  et  seq. 


LOCAL  GOVERNMENT  63 

in  a  country  better  developed  might  have  been  made 
important  sources  of  revenue.  They  were  not  in 
Mexico. 

The  most  important  link  between  state  and  municipal 
governments  and  the  chief  means  by  which  the  former 
came  to  control  the  latter  was  the  jefe  politico,  the  po- 
litical chief,  appointed  in  each  municipality  by  the  gov- 
ernor and  responsible  to  him  alone.  In  some  cases,  as 
in  Morelos,  these  officers  came  to  be  formally  recog- 
nized as  the  presidents  of  the  municipal  councils.  In 
their  hands  rested  the  execution  both  of  the  general  law 
and  of  regulations  passed  by  the  municipal  councils. 
They  were  thus  Janus-faced  officers  who  had  duties  in 
two  directions  but  who  in  practice  could  be  held  respon- 
sible only  by  the  state  functionaries. 

Their  double  position  and  the  very  wide  and  largely 
unwritten  powers  which  they  came  to  exercise  made 
them  one  of  the  chief  reliances  of  the  Diaz  system  of 
actual  government.  An  able  and  benevolent  official 
could  do  much  to  assure  order,  contentment,  and  prog- 
ress in  his  district.  Unfortunately  a  bad  one  who, 
through  the  inertia  of  the  higher  officials  or  corrupt  in- 
fluences could  count  on  the  support  of  the  state  and  na- 
tional military  forces,  might  become  an  oppressor  very 
difficult  to  call  to  account  or  remove. 

In  the  later  years  of  the  Diaz  regime  the  jefes  po- 
liticos  became  the  subject  of  widespread  criticism.  How 
great  the  abuses  came  to  be  it  is  hard  to  determine. 
That  there  were  many  instances  of  wrongdoing  shel- 
tered by  these  officials  is  beyond  doubt.  They  seem  to 
have  been  in  some  districts  the  chief  stay  of  the  peonage 


64    MEXICO  AND  ITS  RECONSTRUCTION 

system.  It  was  to  be  expected  that  when  the  old  regime 
came  to  be  called  to  account  the  office  of  the  men  who 
governed  in  the  locality  but  were  not  subject  to  its  will 
would  be  one  of  the  points  of  attack.  The  revolution 
promised  to  do  away  with  the  jefe  politico  and  to  set  up 
the  free  municipality. 

The  new  system  of  local  government  that  it  is  sought 
to  introduce  starts  out  under  far  from  favorable  condi- 
tions. The  political  inertia  of  the  local  population  in 
the  great  majority  of  municipalities  is  a  heavy  handi- 
cap. Centralization  is  such  a  well  established  tradition, 
acquiescence  in  a  government  imposed  from  above  has 
gone  on  so  long,  that  it  will  be  difficult  to  arouse  the 
cities  and  towns  into  a  vigorous  life.  A  steady  and  uni- 
form advance  in  municipal  government  is  too  much  to 
expect. 

No  one  who  walks  through  the  streets  of  a  Mexican 
town  off  the  line  of  the  great  trunk  railroads  can  be  en- 
thusiastic as  to  the  prospects  of  success  of  real  local  gov- 
ernment in  the  immediate  future.  There  will  probably 
be  many  backslidings  and  the  standard,  which  the  en- 
thusiasts of  the  present  reforming  government  speak 
for,  will  not  be  achieved  in  their  day  nor  in  that  of  their 
grandchildren.  But,  whatever  their  errors  in  other  di- 
rections, there  will  be  little  doubt  in  the  minds  of  most  of 
Mexico's  friends  that  the  revolutionary  statesmen  are 
standing  on  bed  rock  when  they  insist  upon  the  impor- 
tance of  creating  a  keen  interest  in  local  government 
and  the  problems  associated  therewith. 

The  municipalities  are  the  first  school  of  government. 
Within  these  units,  involving  such  simple  problems  as 


LOCAL  GOVERNMENT  65 

will  be  dealt  with  by  the  average  Mexican  city,  mistakes 
can  be  made  with  comparatively  small  harm  while  po- 
litical experience  is  being  gained.  Through  experience 
in  self-government  in  the  towns  there  may  be  built  grad- 
ually the  foundation  of  a  new  Republic  of  Mexico,  a 
republic  of  greater  stability  and  strength  than  the  one 
that  rested  on  economic  advance  alone.  Whether  Mex- 
ico can  build  such  a  state  from  its  present  population 
may  be  doubted  even  by  the  friends  of  Mexico  but  there 
can  be  little  doubt  that  if  it  can  be  built,  the  foundation 
stones  must  be  laid  in  the  municipalities. 


CHAPTER  VI 

MEXICAN  FINANCE:     FOREIGN  LOANS  AND  FOREIGN 

CLAIMS 

IN  discussing  the  financial  operations  of  a  well  or- 
dered country  the  layman's  order  of  approach  may  be 
to  review  the  expenditures  that  it  undertakes  and  their 
purposes,  the  resources  from  which  it  draws  its  revenues 
for  meeting  current  expenses,  and,  finally,  the  debts 
contracted  outside  the  course  of  its  ordinary  life  and 
the  provisions  made  for  paying  them.  But  in  studying 
many  of  the  Latin  American  republics  the  conditions 
seem  to  counsel  studying  the  debt  first  and  then  look- 
ing to  what  financial  resources  there  are  from  which 
to  pay  the  interest  and  sinking  fund  charges  and  the 
expenses  of  current  activities.  In  some  cases  the  na- 
tional debt  or  a  portion  of  it  dates  from  before  national 
independence  and  has  been  an  important  factor  in  the 
national  politics  throughout  the  life  of  the  state. 

In  new  and  undeveloped  countries  also  the  national 
debt  takes  an  unusual  prominence  in  discussions  of  na- 
tional finance  because  it  is  regularly  a  foreign  debt,  at 
least  in  majority,  and  carries  with  it,  therefore,  possible 
complications  with  other  powers.  Often  its  payment 
will  have  been  undertaken  at  a  time  when  the  national 
credit  was  so  low  that  the  capitalists  were  not  willing  to 
accept  the  state's  general  promise  to  pay  but  insisted 

66 


LOANS  AND  CLAIMS  67 

on  the  assignment  of  some  specific  income,  such  as  the 
revenue  from  a  stamp  tax  or  a  percentage  of  the  cus- 
toms dues  at  a  certain  port.  Such  arrangements  make 
the  creditor's  claim  one  still  more  intimately  connected 
with  both  foreign  relations  and  domestic  politics. 

Mexico's  financial  history — both  that  of  her  foreign 
and  of  her  internal  financial  operations — is  a  tangle  that 
cannot  be  reviewed  here  except  in  the  most  general  out- 
line.1 From  the  beginning  to  the  end  of  the  Diaz  regime 
there  was  a  fairly  steady  improvement  in  the  interna- 
tional standing  of  the  republic.  Defaulting,  which  was 
formerly  a  steady  habit,  disappeared  after  order  was 
established,  and  bonds  could  be  sold  with  interest  and 
rate  of  issue  which  did  not  make  them  usurious.  This 
had  by  no  means  been  true  in  early  Mexican  history. 

In  1824,  for  example,  when  obligations  of  a  face 
value  equivalent  to  $16,000,000  were  issued  for  Mexico 
by  the  British  house  B.  A.  Goldsmidt  &  Co.,  the  five 
per  cent  bonds  had  to  be  floated  at  58.2  A  six  per  cent 
loan  the  following  year  brought  89%  per  cent.  After 
1827  the  interest  went  unpaid  for  a  time  and  later  was 
paid  only  irregularly. 

Between  1837  and  1839  the  debt  and  unpaid  interest 
were  refunded.  The  total  of  the  obligations  recognized 

1 A  more  detailed  review  of  the  foreign  debt  is  found  in  the 
Forty-fifth  Annual  Report  of  the  Council  of  the  Corporation  of 
Foreign  Bondholders  .  .  .  for  the  year  1Q18,  London,  1919»  from 
which  the  figures  in  the  following  paragraphs  are  largely  taken. 
See  also  a  careful  analysis  by  W.  F.  McCaleb,  The  Public  Finances 
of  Mexico,  New  York,  1921,  passim. 

2  The  figures  in  this  chapter  are  in  Mexican  gold  except  where 
otherwise  stated. 


68    MEXICO  AND  ITS  RECONSTRUCTION 

was  now  about  $54,573,730.  At  this  time,  too,  the 
debtors  took  an  added  security  for  the  risk  they  assumed 
in  the  grant  of  one-sixth  of  the  customs  receipts  of  Vera 
Cruz  and  Tampico,  the  two  important  east  coast  ports, 
for  the  service  of  the  debt.  But  arrears  arose  again  and 
in  1842,  in  return  for  raising  the  share  of  the  customs 
receipts  devoted  to  the  loan  from  one-sixth  to  one-fifth, 
the  creditors  accepted  non-interest  bearing  "debentures" 
at  the  rate  of  one  dollar  for  each  two  dollars  actually 
due. 

In  1846  the  creditors  agreed  to  another  cutting  down 
of  their  claims.  Various  classes  of  bonds  were  rescaled 
at  90  to  60  per  cent  of  their  face,  the  outstanding  for- 
eign liability  of  $56,206,875  being  decreased  to  $40,533,- 
425.  A  new  five  per  cent  loan  was  issued  to  cover  this 
and  certain  other  liabilities.  This  time  the  security  in- 
cluded besides  one-fifth  of  the  collections  of  the  two 
ports,  a  fifth  of  the  tobacco  duty  and  the  export  duty  on 
silver  shipped  from  the  west  coast. 

The  agreement  had  hardly  been  made  when  war  came 
with  the  United  States  and  as  a  result  the  ports  of  the 
east  coast  fell  into  possession  of  the  enemy,  thus  cutting 
off  part  of  the  guaranteed  income.  A  similar  agreement 
was  put  into  force  again  in  1851.  Interest  payments 
fell  into  arrears.  A  new  refunding  issue  was  put 
through  in  1864  but  payments  almost  immediately  fell 
behind  again. 

In  1864  the  government  of  Maximilian  floated  a  loan 
in  London  and  Paris  of  $61,825,000  at  63  to  secure 
funds  to  crush  the  republican  forces.  These  obligations 
were  later  partly  converted  into  a  second  loan.  When 


LOANS  AND  CLAIMS  69 

the  empire  fell  the  republic  definitely  repudiated  both 
sets  of  debts.  A  part  of  these  issues  was  later  repaid 
to  the  bondholders  by  France. 

Further  borrowings  abroad  were  not  resorted  to  until 
1886.  The  new  regime  then  and  in  1888  put  through 
refunding  measures.  In  1889,  it  sponsored  the  Tehuan- 
tepec  Railway  Loan,  paying  five  per  cent,  issued  at  77 
to  the  amount  of  $13,500,000.  In  1890,  an  issue  of 
$6,700,000  of  six  per  cents  was  made  at  65  to  secure 
money  for  the  Monterey  and  Mexican  Gulf  Railway. 
In  1890,  an  external  six  per  cent  loan  was  made  of  $30,- 
000,000  face,  issued  at  93%  per  cent  secured  by  12  per 
cent  of  the  total  proceeds  of  the  import  and  export  du- 
ties. Three  years  later  another  12  per  cent  was  pledged 
for  the  service  of  a  loan  of  $15,000,000  bearing  six  per 
cent  and  issued  at  68. 

Just  at  the  end  of  the  century  the  five  per  cent  Ex- 
ternal Consolidated  Gold  Loan  was  put  through  which 
is  the  oldest  of  the  direct  external  loans  now  outstand- 
ing against  Mexico.  For  its  service  there  was  to  be  set 
aside  62  per  cent  of  the  national  import  and  export  du- 
ties. The  face  total  of  the  obligations  was  $113,- 
500,000. 

Mexico  was  now  reaping  the  fruits  of  the  establish- 
ment of  order.  Foreign  capital  was  flowing  across  her 
borders  from  all  directions  seeking  opportunity  to  de- 
velop her  resources.  Her  international  credit  stood  on 
a  better  basis  than  ever  before.  In  1903,  the  City  of 
Mexico  was  able  to  sell  at  85,  bonds  amounting  to  $12,- 
000,000,  bearing  five  per  cent  interest.  The  next  year 
the  central  government  floated  at  94  a  loan  of  $40,000,- 


70    MEXICO  AND  ITS  RECONSTRUCTION 

000  bearing  only  four  per  cent  and  that  without  setting 
aside  any  specific  portion  of  the  national  revenues  for 
its  service. 

These  were  days  in  which  Mexico  did  indeed  seem 
to  be  coming  into  its  own.  It  took  up  its  older  obliga- 
tions bearing  higher  rates  of  interest,  it  paid  off  by  the 
new  loan  amounts  it  had  borrowed  at  six  per  cent  to  en- 
courage building  of  railroads,  and  started  public  works 
under  government  support  at  its  less  favored  ports  on 
both  coasts. 

In  1910,  another  refunding  operation  took  place. 
The  loan  of  1899  paying  five  per  cent  was  changed  to 
one  bearing  four  per  cent.  The  half  of  the  new  loan 
issued  in  Paris  in  July  sold  for  97.625  per  cent.  It  was 
guaranteed  by  the  62  per  cent  of  the  import  and  export 
duties,  which  had  protected  the  loan  of  1899. 

The  cloud  of  revolution  was  already  gathering  but 
the  world  would  not  believe  that  its  threat  was  serious. 
Progress  in  Mexico  had  been  so  steady  for  a  generation 
that  it  was  pointed  to  as  the  greatest  of  Latin  American 
states.  A  country,  which  in  1890  saw  its  six  per  cent 
bonds  sell  at  65  per  cent,  now  sold  its  four  per  cents 
at  less  than  three  points  below  par. 

Its  government,  it  seemed,  was  at  last  truly  in  a  po- 
sition to  give  protection  to  life  and  property.  It  could 
now  look  forward  to  an  intensive  development  of  its 
national  resources  sure  to  be  as  wonderful  in  its  results 
as  their  extensive  exploitation  of  the  last  quarter  cen- 
tury had  been.  The  government  could  undertake  pub- 
lic works  without  having  to  pay  high  rates  of  interest 
and,  most  needed  of  all,  the  friends  of  Mexico  felt  that 


LOANS  AND  CLAIMS  71 

now  had  come  the  time  when  the  government,  at  last 
securely  on  its  feet,  should  and  could  give  greater  at- 
tention to  improving  the  social  and  economic  well  being 
of  its  people. 

All  told  the  direct  external  loans,  those  of  1899,  1904, 
and  1910,  now  amounted  to  $140,709,065  plus  the  other 
issues  guaranteed  by  the  government.  These  latter  to- 
taled $104,071,950.  The  two  classes  together  made  a 
debt  of  $244,781,015;  or,  if  the  $50,747,925  General 
Mortgage  Four  Per  Cent  Gold  Bonds  of  the  National 
Railways  of  Mexico  be  included,  $295,528,940.  This 
was  a  debt  easily  borne  by  a  nation  of  15,000,000  people 
whose  territory  was  developing  as  had  that  of  Mexico 
in  the  last  quarter  century. 

But  the  financial  history  of  Mexico  since  1910  does 
not  justify  the  confidence  which  the  investing  world 
then  placed  in  her  nor  the  hopes  that  her  friends  then 
held.  The  revolution  was  not  a  passing  and  unimpor- 
tant storm.  It  soon  became  evident  that  it  was  a  much 
more  fundamental  demonstration  than  even  the  Mex- 
icans best  informed  appear  to  have  believed  at  the  be- 
ginning. One  of  the  indirect  results  that  have  followed 
in  its  train  has  been  the  temporary  paralysis  of  Mexican 
foreign  credit.  When  it  was  realized  that  the  revolution 
was  a  serious  movement,  borrowing  at  once  became 
difficult. 

In  May,  1913,  a  six  per  cent  loan  amounting  to  $80,- 
000,000  was  authorized  by  Presidential  decree.  It  is 
certain  that  $8,100,000  worth  of  these  credits  were 
issued  and  it  is  understood  that  a  very  large  proportion 
of  the  balance  has  been  used  for  various  purposes.  No 


72    MEXICO  AND  ITS  RECONSTRUCTION 

further  loans  appear  to  have  been  made  abroad.8  To 
the  difficulties  of  raising  a  loan  brought  about  by  the 
revolution  there  were  added  those  caused  by  the  World 
War — none  of  the  lending  nations  of  Europe  had 
money  to  lend  after  August,  1914;  and  through  much 
of  the  period  since  that  date  neither  the  government  nor 
the  people  of  the  United  States  would  have  been  will- 
ing to  loan  important  amounts  in  Mexico. 

But  the  World  War  is  not  the  cause  of  the  failure  to 
keep  up  the  services  of  the  foreign  debts  of  Mexico. 
All  but  one  of  the  Mexican  external  debts,  direct  and 
indirect,  were  in  default  after  July  1,  1914,  a  month  be- 
fore the  outbreak  of  the  war  in  Europe  and  since  Jan- 
uary 1,  1915,  no  payments  whatsoever  have  been  made. 
Meanwhile  the  obligations  grow.  By  January  1,  1919, 
they  had  come  to  total  $336,344,080,  not  including  the 
bonds  of  the  National  Railways  of  Mexico. 

When  the  foreign  debt  service  will  be  resumed,  of 
course,  no  one  can  tell.  On  September  1,  1918,  Presi- 
dent Carranza  in  his  message  to  Congress  stated  that 
Congress  had  authorized  him  to  contract  abroad  or  in 
the  republic  three  loans  amounting  to  $300,000,000. 
But  these  were  not  apparently  for  the  service  of  the  for- 
eign obligations  already  incurred.  The  government 
issued  an  official  statement  in  January,  1919,  to  the 
effect  that  it  intended  to  resume  the  payment  of  inter- 
est and  settle  arrears  of  interest  on  the  foreign  debt  "as 
soon  as  the  external  commercial  life  of  the  Nation  has 
been  regulated."  Claims  have  been  put  forward  since 

*  The  various  issues  of  the  revolutionary  period  not  taken  up 
above  are  discussed  in  W.  F.  McCaleb,  op.  cit.,  passim. 


LOANS  AND  CLAIMS  73 

that  time  that  those  now  at  the  head  of  the  affairs  of 
the  republic  control  practically  the  entire  national  area 
and  that  its  foreign  trade  has  been  unusually  prosper- 
ous. Nevertheless  the  recovery  of  normal  conditions 
and  the  resumption  of  the  services  of  the  foreign  debts 
seems  to  outsiders  still  in  the  indefinite  future. 

Unfortunately,  when  the  revolution  is  over,  the  in- 
ternational obligations  of  Mexico  will  not  be  measured 
by  the  loans  the  government  had  made  previous  to  the 
outbreak  of  the  civil  war  and  the  accumulations  of  un- 
paid interest.  In  every  civil  war  there  arise  large  num- 
bers of  claims  by  individuals  for  damages,  which  the 
government  is  called  upon  to  settle.  These,  so  far  as 
the  citizens  of  the  country  are  involved,  can  be  disre- 
garded if  the  government  so  decides,  but  the  damages 
suffered  by  foreigners  are  not  so  easily  put  aside. 

The  destruction  wrought  by  the  armies  of  various 
leadership  that  for  the  past  decade  have  been  keeping 
Mexican  public  life  in  a  turmoil,  and  the  destruction  due 
to  the  actions  of  the  governments  themselves,  especially 
in  interfering  with  the  operation  of  railroads  and  banks, 
the  property  of  foreign  interests,  will  be  the  basis 
of  a  host  of  claims  that  will  probably  amount  to  at  least 
as  much  as  the  outstanding  public  debt.  When  peace 
comes  to  Mexico,  the  national  obligations  to  others  than 
its  own  citizens  will  thus  have  grown  out  of  all  propor- 
tion to  those  carried  before  the  Civil  War.  It  is  not  pos- 
sible at  this  time  to  give  a  satisfactory  estimate  of  the 
claims  that  will  be  presented  for  payment.  A  large 
number,  and  probably  the  most  important,  will  be  those 
of  companies,  especially  those  which  were  engaged  in 


74    MEXICO  AND  ITS  RECONSTRUCTION 

services  affected  with  a  public  interest  such  as  the  rail- 
ways, tramways,  and  light  and  power  companies.  On 
July  31,  1919,  the  Department  of  State  of  the  United 
States  reported  that  942  claims  had  been  filed  by  Amer- 
ican citizens.  Of  these  789  made  a  statement  of  the  ex- 
tent of  damages  suffered  totaling  $26,629,397.61.  The 
claims  of  the  largest  companies  operating  in  Mexico  ap- 
pear not  to  be  included.  No  information  is  available 
showing  the  extent  of  damages  of  citizens  of  other  na- 
tionalities. On  November  24,  1917,  President  Carranza 
by  decree  established  a  commission  for  the  consideration 
of  all  claims  by  foreigners  against  the  government,  but 
the  procedure  provided  was  of  such  character  that  the 
United  States  did  not  find  it  possible  to  approve  it.4 

It  is  not  possible  at  this  time  to  state  the  amount  of 
the  debt  of  Mexico  which  involves  the  rights  of  foreign- 
ers. The  current  discussions  are  seldom  detailed. 
Thomas  R.  Lill,  an  American  accountant,  in  the  service 
of  the  Carranza  government,  stated  before  the  Senate 
Committee  on  Foreign  Relations,  on  September  23, 
1919,  that  the  total  debt  left  by  the  Diaz  regime  was 
about  $425,000,000  Mexican  gold.  He  declared  the 
bonds  approved  by  the  Madero  Congress  and  issued  by 
Huerta  amounted  to  another  190,000,000  pesos;  loans 
due  to  banks,  53,000,000  pesos;  and  back  salaries  due 
to  employees  to  25,000.000  pesos.  This  would  make  a 
total  of  693,000,000  pesos,5  not  including  about  170,- 


*  Senate  Document  1,  66tK  Congress,  1st  Session,  May  20,  1919, 
and  Senate  Document  67,  66th  Congress,  1st  Session,  August  1, 
1919. 

8  C.  Adolfo  de  la  Huerta  in  his  Presidential  address  reported  in 


LOANS  AND  CLAIMS  75 

000,000  pesos  interest  due.  Luis  Cabrera,  Secretary  of 
the  Treasury  in  President  Carranza's  Cabinet,  reported 
the  total  national  debt  as  about  1,000,000,000  pesos, 
or  $500,000,000  United  States  gold.  This  estimate  did 
not  include  a  number  of  important  items  said  to  be 
claimed  by  several  foreign  governments.6  The  secre- 
tary of  Hacienda  announced  that  the  total  debt  as  of 
December  31,  1920,  including  foreign,  internal,  and 
state  delegations,  amounted  to  $426,791,555  Mexican. 
Accrued  interest  and  Tehuantepec  Railroad  bonds 
amounted  to  $197,707,142  Mexican.  The  total  of  these 
items  is  $624,498,697  Mexican.7 

These  estimates  by  employees  of  the  Carranza  and 
Obregon  governments  are  much  smaller  than  those  of 
some  of  the  best  informed  Mexicans  outside  governmen- 
tal circles.  A  calculation  published  under  the  direction 
of  a  group  of  Mexican  economists  places  the  interior  and 
exterior  debt  in  August,  1920,  at  $1,200,000,000  Mex- 
ican. The  obligations  that  the  country  has  incurred 
through  damages  to  banking,  railway,  and  other  inter- 
ests belonging  to  nationals  and  foreigners  is  referred  to 
as  an  additional  large  but  unnamed  sum.  The  cash 

the  Diario  Oficial,  September  2  et  seq,  1920,  reported  the  entire 
obligations,  foreign  and  domestic,  as  totaling  657,599*122  pesos, 
including  interest  due. 

*  These  statements  are  based  on  the  summary  in  the  Commercial 
and  Financial  Chronicle,  November  15,  1919,  p.  1837.  The  testi- 
mony as  to  the  amount  of  the  Mexican  debts  is  presented  in  detail 
in  Investigation  of  Mexican  Affairs,  Hearing  Before  a  Sub-commit- 
tee of  the  Committee  on  Foreign  Relations  of  the  United  States 
Senate,  66th  Congress,  1st  Session,  pursuant  to  S.  Res.  106,  part 
8,  Washington,  1919- 

1  Commerce  Reports,  June  14,  1921. 


76    MEXICO  AND  ITS  RECONSTRUCTION 

taken  over  from  the  banks  manu  militari  amounted  to 
about  $54,000,000  Mexican  "according  to  the  official 
figures  of  the  Carranza  government." 

Before  leaving  the  discussion  of  the  foreign  debts  of 
Mexico  it  is  worth  while  calling  attention  to  several  fea- 
tures of  their  history  which  may  have  a  bearing  on  what 
may  be  expected  or  what  should  be  demanded  by  in- 
vestors in  the  period  of  reconstruction. 

First  of  all,  it  is  often  asserted  by  Mexicans  and  by 
mistaken  friends  of  Mexico  that  the  republic  has  always 
meticulously  fulfilled  its  financial  obligations.  The 
facts  concerning  the  foreign  debts  above  outlined  make 
it  necessary  to  interpret  these  words  in  a  very  special 
way  if  they  are  to  be  held  to  state  the  truth.  As  has 
been  indicated,  the  earlier  history  of  Mexico  shows  im- 
portant readjustments  of  the  claims  of  foreign  creditors 
which  cut  down  the  amount  they  were  to  be  paid.  To 
be  sure  the  creditors  agreed  to  the  scaling  of  their 
claims  and  it  may  be  insisted  that  Mexico  did  not  repu- 
diate the  obligations,  except  in  the  justified  cases  of  the 
Maximilian  era.  Nevertheless,  it  is  true,  of  course,  that 
the  reduction  of  claims  was  not  a  free-will  offering  upon 
the  part  of  the  creditors.  They  consented  because  the 
finances  of  the  republic  had  come  to  such  a  state  that 
they  felt  it  desirable  to  sacrifice  part  of  their  property 
in  order  to  obtain  a  chance  to  save  the  rest.  Mexico 
may  not  have  repudiated  her  obligations  actually  but 

8  Manuel  Calero,  Ensayo  sobre  la  reconstruction  de  Mexico,  New 
York,  1920,  p.  89.  This  review  published  by  a  group  of  nine  promi- 
nent Mexicans  headed  by  Manuel  Calero  is  a  good  summary  of 
moderate  progressive  opinion  on  Mexican  affairs. 


LOANS  AND  CLAIMS  77 

the  effect  upon  the  creditors  was  the  same  as  if  they  had 
held  the  notes  of  a  corporation  that  had  become  bank- 
rupt and  could  not  pay  its  creditors  in  full.  It  need 
hardly  be  said  that  this  is  not  a  way  of  fulfilling  its 
financial  obligations  that  contributed  to  the  credit  of  the 
republic. 

The  claim  so  often  made  in  connection  with  Latin 
American  countries  that  their  revolutions  are  not  to  be 
taken  seriously  and  that  they  have  no  important  effect 
on  the  national  economic  life,  has  no  application  when 
the  foreign  loans  of  Mexico  are  under  consideration. 
When  Mexico  has  not  had  a  stable  government,  she  has 
not  paid  regularly  interest  on  her  debts  and  the  prin- 
cipals of  the  debts  have  been  paid  by  new  borrowings. 
The  only  long  period  in  which  interest  payments  were 
punctually  made  was  in  the  Diaz  regime. 

Unless  some  guarantee  of  payment  of  interest  and 
principal  can  be  secured  that  will  be  enforceable  and 
that  will  be  enforced  by  some  other  government  if  Mex- 
ico fails  to  do  so,  the  loan  of  money  to  any  Mexican  gov- 
ernment that  has  not  proved  its  stability  is  a  highly 
speculative  venture.  The  interest  rate  that  the  investor 
will  have  to  demand  will  naturally  be  higher,  that  is 
Mexico  will  have  to  pay  more,  if  there  is  no  guarantee. 
These  are  facts,  which  those  who  refinance  Mexico  in 
the  reconstruction  period  will  have  to  take  into  serious 
consideration.  It  may  well  be  doubted  whether  the 
dangers  to  national  independence  alleged  to  attend  for- 
eign loans  are  less  when  money  is  borrowed  in  the  open 
market  at  a  high  rate  by  a  weak  nation,  than  when  made 
at  a  lower  rate  under  the  guarantee  of  a  more  power- 


78    MEXICO  AND  ITS  RECONSTRUCTION 

ful  country  that  it  will  help  so  to  shape  conditions  that 
the  stipulations  of  the  contract  may  be  fulfilled. 

Thirdly,  the  declarations  on  the  part  of  certain  Mex- 
ican statesmen  that  any  sort  of  special  guarantee  for 
the  payment  of  debts  is  without  precedent,  a  reflection 
on  the  national  honor  and  not  to  be  considered,  are  dec- 
larations that  lack  straightforwardness.  The  financial 
record  of  the  republic  shows  numerous  cases  of  hypothe- 
cation of  special  revenues  for  the  service  of  the  foreign 
loans.  In  fact  the  republic,  except  for  the  first  quarter 
century  of  its  existence,  the  record  shows,  has  never  been 
without  special  claims  on  the  national  income  in  favor  of 
certain  of  its  foreign  creditors. 

The  direct  external  loans  now  in  force  are  all,  with 
the  exception  of  the  gold  loan  of  1904,  nominally  under 
the  protection  of  special  guarantees.  The  loans  of  1899 
and  1910  are  secured  on  62  per  cent  of  the  national  im- 
port and  export  duties  and  the  bonds  of  1913  issued  dur- 
ing the  revolution  are  a  lien  upon  the  rest. 

Governments  avoid  such  agreements  if  they  can,  but 
Mexico  has  not  been  able  to  do  so.  She  seemed  to  be 
approaching  that  condition  in  1904  and  doubtless  the 
loan  of  1910  might  have  been  negotiated  without  spe- 
cial guarantee  but  for  the  fact  that  it  was  a  refunding 
measure  and  the  creditors  were  in  a  position  to  demand 
the  continuance  of  their  former  security.  It  seems 
hardly  to  be  expected  that  any  project  for  financing  the 
reconstruction  of  the  country  will  lack  features  of  this 
sort. 

What  guarantees  of  this  sort  actually  mean  is  not 
clear.  In  times  of  peace,  with  a  responsible  government 


LOANS  AND  CLAIMS  79 

in  control,  they  constitute  a  check  on  the  spending  power 
of  the  government  and  promote  promptness  of  pay- 
ments. But  under  normal  conditions  a  responsible  gov- 
ernment pays  even  without  such  guarantees.  In  time 
of  civil  disturbance  in  Mexico  none  of  the  passing  gov- 
ernments has  apparently  felt  the  agreements  to  be  ones 
it  must  obey.  At  the  only  time  when  reliance  needed 
to  be  placed  on  the  special  guarantees  they  did  not  serve, 
and  the  bondholders  find  themselves  in  a  position  in 
which  it  appears  the  local  government  does  not  recog- 
nize its  responsibility  nor  can  they  force  it  to  do  so  by 
calling  on  their  home  governments  to  aid  in  securing 
the  fulfillment  of  the  contracts. 

If  is  true,  of  course,  that  the  Mexican  debt  service 
clauses  may  at  any  time  be  held  to  mean  more  than 
has  appeared  to  be  the  case.  The  debts  went  into  de- 
fault just  before  the  outbreak  of  the  World  War,  and 
had  peace  continued  elsewhere  during  the  later  period 
of  the  revolution  it  is  possible  that  pressure  would  have 
been  put  upon  the  government  of  Mexico  to  live  up  to 
its  contracts. 

If  this  is  not  the  case,  it  appears  clear  that  the  form 
of  guarantee  found  in  Mexican  loan  contracts  is  of  little 
value  whenever  a  government  wishes  to  disregard  it, 
whether  in  time  of  peace  or  of  civil  disturbance.  If  a 
guarantee  cannot  be  secured,  which  means  that  the  for- 
eign government  shall  have  a  right  to  see  to  its  enforce- 
ment, and  if  the  enforcement  by  the  foreign  government 
cannot  be  considered  reasonably  certain,  then  investors 
in  the  securities  of  unstable  countries  must  consider  their 
money  risked  in  a  speculative  venture  for  which  they 


80    MEXICO  AND  ITS  RECONSTRUCTION 

must  be  compensated  by  high  interest  rates  or  low  rates 
of  issue  or  both. 

That  such  a  basis  for  the  financial  rehabilitation  of 
Mexico  would  be  unfortunate  is  clear.  If  the  debt  serv- 
ice guarantees  furnish  a  basis  upon  which  other  coun- 
tries may  help  her  to  help  herself,  she  may  secure  do- 
mestic order  and  a  responsible  government  sooner  than 
would  otherwise  be  her  lot.  If  those  debt  service  con- 
tracts now  in  existence  do  not  furnish  such  a  basis  and 
the  Mexican  government  refuses  to  enter  new  ones  that 
will  do  so  in  the  future,  then  it  must  borrow  on  the 
chance  which  it  has,  unaided,  of  being  able  to  meet  the 
obligations  it  assumes.  It  will  perforce  load  the  people 
with  greater  obligations  than  would  be  necessary  other- 
wise and  delay  the  real  reconstruction,  which  every 
friend  of  Mexico  must  hope  may  soon  begin  and  rapidly 
progress.  Some  sort  of  effective  international  guaran- 
tee of  the  foreign  loans  seems  highly  desirable,  not  only 
for  the  protection  of  the  investor  and  not  even  prin- 
cipally for  him,  but  for  the  benefit  of  Mexico  and  of  her 
people. 

The  basis  on  which  debts  should  be  paid  in  justice  to 
the  lender  often  bears  a  strong  contrast  to  that  which 
is  practical.  What  has  occurred  in  a  number  of  in- 
stances in  the  past  may  again  prove  to  be  the  case  in 
Mexico.  At  first  sight  even  the  highest  figures  dis- 
cussed do  not  appear  to  be  an  overwhelming  load  for 
the  nation  to  bear.  Compared  to  the  burden  that  the 
World  War  has  put  upon  many  Western  nations,  the 
debt  seems  small.  Even  assuming  that  the  total  may 
be  as  great  as  $1,500,000,000  Mexican,  the  debt  per 


LOANS  A&D  CLAIMS  81 

capita  would  be  only  about  one-fourth  as  great  as  that 
which  the  people  of  the  United  States  are  now  called 
upon  to  carry.  But  such  comparisons  are  deceptive  for 
they  fail  to  take  into  account  the  economic  weakness  of 
the  Mexican  population  even  in  comparatively  prosper- 
ous times,  a  weakness  now  much  accentuated  by  a  dec- 
ade of  civil  disturbance. 

Mexico,  in  the  old  regime,  mortgaged  her  future  to 
secure  economic  advance.  She  now  finds  herself  called 
upon  to  mortgage  the  future  to  pay  the  cost  of  the  up- 
heaval that  destroyed  much  of  the  advance  attained. 
Unfortunately  the  pressure  to  meet  her  obligations 
comes  upon  her  at  a  time  when  she  is  least  able  to  make 
favorable  terms.  The  post-revolutionary  governments 
face  a  world  money  market  in  which  the  French  govern- 
ment has  to  borrow  abroad  at  eight  per  cent  and  in 
which  that  interest  rate  is  a  fair  average  of  the  payments 
on  the  loans  of  the  most  favored  of  European  countries. 
It  is  hardly  to  be  expected  that  under  such  circum- 
stances those  who  loan  their  money  in  Mexico  will  not 
expect  an  unusual  return. 

When  the  Mexican  governments  look  to  the  resources 
upon  which  they  can  count  to  meet  the  interest  on  their 
borrowings,  past  and  to  come,  the  prospect  is  far  from 
encouraging.  In  a  country  even  now  not  completely  at 
peace  with  itself  money  must  be  raised  from  agricul- 
tural interests  badly  disorganized,  cattle  resources  hard 
hit  by  the  drain  of  ten  years'  army  requirements,  mining 
still  suffering  from  the  results  of  disturbed  industrial 
conditions,  and  a  labor  supply  depleted  of  many  of  its 
most  enterprising  elements  by  emigration.  What  com- 


82    MEXICO  AND  ITS  RECONSTRUCTION 

merce  can  be  taxed  must  move  over  roads  and  railways 
very  badly  neglected  and  must  rely  on  banking  facilities 
still  sadly  inadequate.  To  this  discouraging  outlook  is 
to  be  added  the  declining  price  scale  of  the  chief  com- 
modities that  Mexico  sends  to  foreign  markets. 

Confronted  by  such  an  economic  outlook  it  is  not  to 
be  wondered  at  if  the  Mexican  governments  fall  into 
believing  that  the  end  justifies  the  means  and  like  a 
drowning  man  catch  at  straws. 


CHAPTER  VII 

MEXICAN  FINANCE:     CURRENCY  AND   THE  BANKS 

As  has  been  indicated,  the  debts  of  Mexico  to  its  own 
citizens  are  not  ones  that  involve  the  possibility  of  in- 
ternational complications.  If  Mexican  property  is  de- 
stroyed, the  only  recourse  for  the  injured  is  to  the  Mex- 
ican government.  To  what  degree  the  governments  of 
the  reconstruction  period  will  feel  themselves  bound, 
or  find  themselves  able,  to  make  restitution  to  Mexican 
citizens  for  property  confiscated,  or  taken  over  in  return 
for  warrants  issued  by  the  various  generals,  can  not  be 
indicated.  There  is  little  reason  to  believe  that  any  seri- 
ous effort  will  be  made  for  a  general  restitution.  Much 
of  the  property  was  taken  or  destroyed  under  such  con- 
fusing conditions  that  it  would  be  impossible  to  deter- 
mine what  justice  demands.  In  addition,  the  govern- 
ment will  not  pay  because  it  cannot  if  it  would.  Heavy 
as  the  foreign  obligations  of  Mexico  are,  the  domestic 
ones  are  on  their  face  still  greater. 

Much  of  the  property  loss  suffered  by  the  Mexican 
people  occurred  in  connection  with  the  various  issues  of 
paper  money  authorized  by  the  passing  governments 
and  put  in  circulation  under  circumstances  that  made 
them  practically  the  equivalent  of  forced  loans.  In  fact 
far  the  greater  part  of  the  nominal  value  represented  by 
them  already  has  been  finally  repudiated  and  whatever 
loss  occurred  will  never  be  repaid. 

83 


84    MEXICO  AND  ITS  RECONSTRUCTION 

All  but  a  small  part  of  this  money,  it  is  true,  never 
circulated  at  its  face  value,  if  indeed  any  of  it  ever  did, 
a  fact  that  has  disposed  those  who  have  come  into  power 
to  refuse  to  redeem  it  at  its  face.  It  is  beyond  doubt, 
however,  that  the  rates  at  which  the  issues  that  have 
been  "redeemed,"  were  paid  for,  were  lower  than  those 
at  which  they  were  originally  issued  and  that  this  loss 
has  fallen  on  the  people  of  Mexico. 

The  extravagant  character  of  the  paper  money  regime 
through  which  Mexico  passed  and  from  which  she  has 
recently  made  successful  efforts  to  free  herself  can  be 
judged  best  in  the  light  of  the  currency  system,  which 
had  been  created  previously. 

Through  a  large  part  of  Mexican  history  the  coinage 
has  been  intimately  connected  with  the  taxing  system. 
Precious  metals  were  so  important  a  part  of  the  exports 
of  the  country  that  the  expedient  of  taxing  them  was 
early  resorted  to.  The  system  that  came  into  use  was  to 
require  all  gold  and  silver  extracted  to  be  taken  to  the 
mints  where  it  was  made  into  coin  at  a  charge  of  about 
five  per  cent.  In  addition,  an  export  duty  of  five  per 
cent  on  silver  and  one  half  per  cent  on  gold  was  levied 
on  the  metal  leaving  the  country.  In  1872  export  of 
silver  in  bars  was  allowed,  providing  it  went  through  the 
mints  and  paid  taxes  almost  as  heavy  as  if  coined.  On 
November  1,  1882,  all  export  duties  on  metals  were  re- 
moved. Under  these  conditions  currency  in  Mexico  ap- 
proached more  nearly  to  the  character  of  merchandise 
than  in  most  countries. 

The  Mexican  eagle  dollar  coined  in  the  early  years  of 
the  Diaz  regime  weighed  .869  of  an  ounce  and  was  of 


CURRENCY  AND  THE  BANKS          85 

.901  fineness.  It  sold  abroad  by  weight  usually  at  a 
slight  discount  as  compared  to  bar  silver  though  occa- 
sionally it  had  a  premium  for  export  to  the  Far  East 
where  it  circulated  as  coin.1 

By  Presidential  decree  of  March  25,  1905,  and  the 
monetary  law  of  December  9,  1914,  the  Mexican  mon- 
etary unit  was  declared  to  be  the  silver  peso  the  value  of 
which  was  fixed  by  the  law  at  the  equivalent  of  $.4985 
in  United  States  gold  coin.  This  legislation  placed 
Mexico  among  the  countries  using  the  gold  standard. 

Those  in  control  of  the  government  in  the  first  years 
of  the  revolution  avoided  the  use  of  paper  money  but  a 
more  radical  policy  was  adopted  to  furnish  funds  to 
finance  the  revolution  headed  by  Carranza.  On  April 
26, 1913,  to  help  pay  the  expenses  of  his  army  Carranza, 
by  decree,  authorized  the  issue  of  $5,000,000  Mexican 
in  paper  since  known  as  the  Monclova  issue.  These  bills 
were  to  pass  at  face  as  legal  tender.  Those  who  re- 
fused to  accept  them  faced  jail  sentences. 

As  often  has  been  the  case  when  governmental  author- 
ities have  yielded  to  the  temptation  to  issue  fiat  money, 
it  became  in  this  case  impossible  for  them  to  summon  the 
resolution  not  to  do  so  again.  It  was  an  easy  way  to 
meet  expenses.  The  bills  issued  were  poorly  printed 
and  counterfeits  soon  appeared  from  all  directions,  in- 
cluding United  States  ports.  Even  the  official  issue 

1  Reports  from  Her  Majesty's  Diplomatic  and  Consular  Officers 
Abroad,  Commercial  No.  36  (1883),  .  .  .  Part  VII,  .  .  .  Report 
by  Lionel  E.  G.  Garden  on  the  trade  and  commerce  of  Mexico,  gives 
a  good  description  of  the  conditions  in  the  early  eighties  of  the  last 
century. 


86    MEXICO  AND  ITS  RECONSTRUCTION 

was  soon  exhausted.  Another  decree  of  November  28, 
1913,  raised  the  total  by  $20,000,000  Mexican  and  was 
Soon  followed  by  others  necessitated  by  the  continuing 
needs  of  the  army  and  the  steady  decline  in  the  rate  at 
which  the  bills  were  currently  accepted.  Meanwhile 
Villa,  Zapata,  and  others  were  issuing  rival  currencies 
forced  into  circulation  in  the  districts  they  controlled. 
*Later  Carranza  was  forced  to  retire  to  Vera  Cruz  and 
from  that  city  he  issued  quantities  of  "Vera  Cruz  bills." 
The  value  of  Carranza  paper  continued  to  fall,  and 
counterfeits  continued.  It  was  evident  that  soon  the 
"bilimbiques,"  as  his  paper  was  nicknamed,  would  be  so 
low  in  value  that  they  would  not  circulate  at  all. 

Under  these  circumstances  a  decree  was  issued  July 
21,  1919,  alleging  that  counterfeits  had  destroyed  the 
confidence  of  the  people  in  the  paper  issued  and  author- 
izing another  issue  of  "infalsificable"  notes,  which  were 
to  retire  all  Carranza  paper  previously  authorized.  The 
issue  was  of  $500,000,000  Mexican  and  was  to  be  backed 
by  metallic  reserves  which  never  were  created.  These 
bills  were  printed  in  New  York  and,  unlike  their  pred- 
ecessors, were  well  made.  Previous  issues  of  the  Car- 
ranza government,  not  counterfeits,  were  to  be  re- 
deemed at  a  set  rate  until  June  30, 1916.  All  paper  cur- 
rencies, except  the  new  issue,  were  then  declared  no 
longer  legal  tender. 

All  told  there  had  been  some  200  issues  of  various 
origins  current  in  the  republic,  most  of  which  had  rap- 
idly declined  in  value  after  their  appearance — as  the 
"infalsificables"  now  proceeded  to  do. 

,The  total  paper  currency  "legal"  and  "counterfeit" 


CURRENCY  AND  THE  BANKS          87 

put  out  in  1913-16  is  estimated  to  have  had  a  face  value 
of  over  $2,000,000,000  Mexican.  The  Carranza  issues 
alone  totaled  about  $1,250,000,000  as  follows : 2 

Monclava $     5,000,000 

Ejercito  Constitucionalista 25,000,000 

Gobierno  Provisional  (Mexico  City) 42,625,000 

Vera  Cruz  (Provisional  Government) 599,329,321 

Infalsificable 599,329,321 

The  record  of  the  effects  of  the  paper  money  issues 
upon  the  economic  life  of  the  nation  reads  like  pages 
from  the  Arabian  Nights.  As  long  as  the  money,  issued 
in  large  quantities,  had  any  appreciable  value,  those  who 
could  command  gold  and  who  were  in  a  position  to  profit 
by  a  rapidly  falling  exchange  were  able  to  build  up  f  or- 
$unes  in  a  way  little  short  of  fantastic. 

Wages  remained  nominally  at  their  former  standard 
for  a  time  and  then  adjusted  themselves  but  slowly  to 
the  new  money  values.  Large  debts  could  be  paid  off 
with  money  the  current  value  of  which  in  gold  was  as 
low  as  five  per  cent  of  its  face.  When  the  government 
took  over  the  banks,  it  found  itself  caught  between  its 
own  decree  that  its  paper  must  be  accepted  for  payment 
of  all  obligations  and  the  fact  that  the  loans  and  mort- 
gages of  which  it  had  taken  charge  could  be  paid  off 
in  the  same  money. 

Real  estate  purchases  from  sympathizers  with  the  old 
regime  or  persons  despairing  of  the  reestablishment  of 


2  These  figures  and  the  facts  cited  above  concerning  paper  money 
issues  are  taken  from  W.  F.  McCaleb,  The  Public  Financeg  of 
Mexico,  New  York,  1921,  pp.  223-39. 


88    MEXICO  AND  ITS  RECONSTRUCTION 

order  were  made  on  the  most  remarkable  of  terms.  The 
property  might  be  heavily  mortgaged  to  a  neighboring 
bank,  but  the  owner  might  at  the  same  time  have  an 
equity  representing  a  considerable  capital.  Neverthe- 
less, in  the  face  of  the  revolutionary  storm,  his  first  im- 
pulse was  to  save  what  he  could  and  make  his  way  out  of 
the  country  to  safety.  He  would  sell  his  property  at  its 
former  value  accepting  payment  in  depreciated  paper 
at  its  face,  pay  off  his  mortgage  to  the  bank  in  the  same 
paper,  and  leave  the  country. 

The  result  of  such  operations  was  peculiar,  the  ad- 
venturous buyer  got  the  property  for  perhaps  a  twen- 
tieth of  its  real  gold  value,  yet  he  paid  a  fair  price  in 
the  money  that  the  government  was  forcing  the  people 
to  accept.  The  seller  was  equally  well  satisfied  for  he 
paid  off  his  debt  to  the  mortgagee  under  terms  that  the 
government  itself  upheld  and  he  saved  at  least  a  little 
from  ruin.  The  government,  which  had  brought  on 
these  conditions  and  which  through  taking  over  the 
banks  was  under  obligation  to  receive  its  own  depre- 
ciated currency  as  the  measure  of  the  non-metallic  assets, 
into  possession  of  which  it  came  by  that  act,  was  the  only 
party  to  the  transactions  which  might  be  disappointed. 
In  the  background,  for  the  moment  at  least,  were  the 
former  stockholders  of  the  banks  who  saw  their  assets 
vanishing  with  only  a  hope  that  they  might  be  reim- 
bursed for  their  loss  at  some  distant  time. 

The  period  of  wildest  financial  inflation  fell  between 
October,  1914,  and  October,  1916.  On  the  whole  the 
course  of  all  the  paper  issues  was  steadily  downward. 
By  the  latter  part  of  1915  Vera  Cruz  bills,  for  example, 


CURRENCY  AND  THE  BANKS          89 

were  worth  about  one  per  cent  of  their  face.  When  the 
"infalsificable"  came  out  in  April,  1916,  it  was  accepted 
at  a  gold  value  of  about  20  cents  Mexican.  The  govern- 
ment forced  its  acceptance  by  decree.  For  a  time  the 
old  Vera  Cruz  issue  was  exchanged  against  the  new 
money  at  ten  of  the  old  for  one  of  the  new.  Then  even 
this  sort  of  "redemption"  ceased.  The  "infalsificables" 
began  to  depreciate  alarmingly.  Eight  months  after 
their  issue  they  had  fallen  to  80  to  one  as  compared  to 
gold  and  at  the  end  of  1916  they  were  little  better  than 
Vera  Cruz  bills. 

Their  subsequent  history  is  brief.  They  were  never 
formally  repudiated  by  the  Carranza  government. 
When  it  had  been  decided  that  the  "infalsificables"  could 
no  longer  be  relied  upon  as  the  regular  currency,  it  was 
arranged  to  demand  that  all  customs  dues  be  paid  in 
gold  plus  an  equal  amount  in  "infalsificables."  In  this 
way  the  issue  was  to  be  "redeemed."  At  first  the  re- 
quirement was  little  more  than  formal,  for  the  bills  were 
practically  valueless.  By  July  10,  1919,  $397,119,298 
Mexican  were  reported  to  have  been  retired  and  by 
October  18,  1919,  their  value  had  risen  to  $.0765  in 
Mexican  metallic  currency.8  A  summary  of  the  gold 
debt  issued  by  Minister  Cabrera  published  in  1920  as- 
signs an  item  of  $10,125,000  Mexican  for  the  redemp- 
tion of  Vera  Cruz  and  "infalsificable"  bills.4 

3  Commerce  Reports,  November  26,  1919. 

*El  Heraldo  de  Mexico,  March  26,  1920,  quoted  by  W.  F.  Mc- 

Caleb,  op.  ciL,  p.  252.     The  Presidential  address  of  C.  Adolfo  de 

la  Huerta  published  in  the  Diario  Oficial,  September  2,  1920,  states 

*that   the    "infalsificables"  'then   outstanding   totaled   $106,787,862 

Mexican. 


90    MEXICO  AND  ITS  RECONSTRUCTION 

The  Carranza  government  had  meanwhile  decided 
that  the  time  for  reliance  on  paper  currency  had  passed 
and  a  decree  issued  that  all  payments  should  thereafter 
he  made  in  coin. 

This  third  attempt  at  regulating  the  currency  system 
was  inaugurated  in  December,  1916.  It  had  a  success 
far  beyond  what  might  have  been  expected  and  certainly 
far  beyond  that  which  would  have  attended  it  had  not 
conditions  outside  the  republic  become  abnormal  and 
such  as  to  help  the  Carranza  government  in  its  new  ex- 
periment. The  World  War  was  now  in  its  most  critical 
period.  Prices  were  high  and  there  was  an  unprece- 
dented export  demand  for  all  articles  that  the  much- 
tried  country  was  able  to  produce.  These  conditions 
brought  to  Mexico  the  unusual  circumstance  of  a  favor- 
able balance  of  trade.  During  previous  years  a  large 
part  of  the  gold  coinage  had  been  exported,  and  with 
the  coming  of  the  paper  money  era  silver  disappeared 
or  fled  the  country.  Even  the  smaller  metallic  coins 
tended  to  be  withdrawn  at  one  time  and  had  to  be  re- 
placed by  little  slips  of  stamped  cardboard. 

Now,  however,  with  the  favorable  balance  of  trade, 
gold  was  flowing  back  into  the  country,  silver  was  rising 
in  price  and  silver  continued,  as  it  had  always  been,  one 
of  the  things  produced  in  large  quantities.  Between 
December,  1916,  and  July,  1918,  the  coinage  of  money 
within  the  country  reached  the  unprecedented  total  of 
$93,900,000,  from  which  coinage,  it  may  be  remarked  in 
passing,  the  government  had  profited  through  the  stamp 
tax,  assay  charges,  and  other  levies  to  the  amount  of 
$6,000,000.  This  coinage  was  not  only  silver.  Gold 


CURRENCY  AND  THE  BANKS          91 

produced  in  the  country  which  the  government  could 
coin,  it  would  not  allow  to  be  exported.  It  had  to  be 
sent  to  the  mint.  Gold  bearing  ore  could  be  exported 
only  if  an  equivalent  value  in  gold  was  returned  to  Mex- 
ico. Silver  could  be  exported  only  if  an  equivalent  of 
25  per  cent  was  returned  in  gold.  Evidently  events  had 
turned  in  such  a  way  that  the  creation  of  a  metallic  basis 
for  the  currency  could  be  accomplished  much  more  eas- 
ily and  quickly  than  would  have  been  the  case  in  nor- 
mal times.  By  June,  1918,  there  were  reported  to  be 
250,000,000  silver  pesos  in  circulation  in  the  republic. 

The  next  development  was  the  monetary  decree  of 
November  13,  1918,  induced  by  the  continued  rise  in  the 
value  of  silver.  The  old  pesos  were  withdrawn  and  a 
new  series  issued  about  three-fourths  the  size  of  the  old 
ones,  weighing  181/2  grams  of  which  141/2  were  pure 
silver.  New  subsidiary  coins  were  also  issued.  The 
gold  basis  for  the  currency  was  not  disturbed.  In  the 
process  of  the  change  from  one  basis  to  the  other  large 
amounts  of  the  coins  of  the  old  issue  were  melted  down 
and  sold  as  silver  by  those  who  had  hoarded  them.  The 
transfer  from  the  old  to  the  new  currency  does  not  seem 
to  have  involved  serious  difficulties  to  local  commerce. 

A  review  of  the  financial  problems  that  confront  the 
republic  must  include  at  least  a  brief  mention  of  the 
more  recent  banking  developments.6  Before  the  revolu- 
tion the  banking  system  of  Mexico  was  based  on  the 
law  of  1897,  which  divided  financial  institutions  into 

5  A  detailed  discussion  of  Mexican  banking  is  found  in  W.  F. 
McCaleb,  Present  and  Past  Banking  in  Mexico,  New  York,  1921, 
passim. 


92    MEXICO  AND  ITS  RECONSTRUCTION 

three  classes:  (1)  banks  of  issue;  (2)  mortgage  banks, 
which  made  loans  on  urban  and  rural  properties  and 
issued  bonds  secured  by  a  similar  guarantee;  and  (3) 
banks  of  promotion  to  encourage  mining,  agriculture, 
and  industry.  Under  this  law  there  were  established, 
between  1897  and  1913,  32  banks  of  issue  of  which 
20  were  in  existence  in  the  latter  year  with  assets 
amounting  to  $425,500,000.  Mortgage  banks  also  flour- 
ished. Four  had  been  established  by  1913  with  assets 
then  totaling  $43,762,000.  Banks  of  promotion  had 
been  created  to  the  number  of  six  which  in  1913  had 
assets  of  $83,000,000. 

In  addition  to  these  institutions,  operating  under  the 
law  of  1897,  there  were  a  loan  bank  for  promoting  agri- 
cultural and  irrigation  enterprises,  six  branches  of  for- 
eign banks,  a  number  of  private  banks,  and  a  national 
pawn  shop,  which  had  some  of  the  characteristics  of  a 
bank. 

During  the  revolution  this  financial  structure  was  torn 
down.  The  assets  of  $600,000,000  were  wiped  out,  its 
reserves  taken  over,  and  the  institutions  finally  declared 
insolvent.  Since  1914  the  country  has  been  practically 
without  banks  as  that  term  was  used  in  the  law  of  1897. 
By  an  order  of  September  15,  1916,  the  government 
closed  all  the  regular  banks.  A  few  private  institutions 
have  since  been  in  operation  but  their  activities  have 
been  confined  practically  to  purchase  of  foreign  ex- 
change and  minor  commercial  credit  transactions. 

What  is  to  take  the  place  of  the  former  Mexican 
banking  system  is  not  yet  clear.  The  Congress  granted 
jto  the  President  power  to  establish  a  single  bank  of 


CURRENCY  AND  THE  BANKS          93 

issue  by  decree.  In  September,  1918,  he  reported  a  bill 
to  Congress  and  stated  that  he  had  not  acted  on  the 
authority  before  because  of  the  uncertainty  of  the  money 
market.  The  measure  proposed  provided  for  a  single 
bank  of  issue  similar  in  name  to  those  under  the  law 
of  1897  but  with  more  restricted  powers.  There  were 
also  petroleum  banks,  for  the  encouragement  of  the  oil 
industry  and  banks  of  deposit.  Branches  of  foreign 
banks  were  to  be  required  to  come  under  the  law  within 
six  months  or  cease  operations.  The  foreign  banks, 
their  capital  and  their  employees  were  to  be  considered 
Mexican  for  all  purposes.  Appeal  to  the  home  coun- 
try could  not  be  taken  on  their  behalf.  The  program 
was  one  that  reflected  the  general  policy  of  "nationali- 
zation" supported  by  the  government.6  No  important 
advance  in  banking  legislation  has  as  yet  been  made  by 
the  revolutionary  governments. 

*  A  review  of  Mexican  banking  from  which  the  above  facts  are 
chiefly  taken  and  which  gives  a  detailed  analysis  of  the  proposed 
law  is  found  in  Commerce  Reports,  February  1,  1919,  "The  New 
Banking  Law  of  the  Republic  of  Mexico,"  by  Edward  F.  Feely. 
See  also  on  currency  issues  and  banking  Investigation  of  Mexican 
Affairs,  Hearing  Before  a  Sub-committee  of  the  Committee  on  For- 
eign Relations,  United  States  Senate,  66th  Congress,  1st  Session, 
pursuant  to  S.  Res.  106,  Washington,  1919*  part  5. 


CHAPTER   VIII 

MEXICAN  FINANCE:    PUBLIC  INCOME  AND 
EXPENDITURE 

As  IN  every  other  country  the  means  at  the  disposal 
of  the  Mexican  government  for  meeting  its  foreign  and 
domestic  obligations  are  determined  by  the  natural  re- 
sources of  the  country,  the  economic  development  of  its 
people,  and  the  taxation  system  that  has  been  adopted. 
The  latter  two  elements  are  capable  of  gradual  changes. 
Such  have  occurred  and  are  in  process.  But  neither  can 
be  revolutionized  with  the  overthrow  of  one  government 
and  the  establishment  of  another,  because  each  depends 
upon  the  development  of  the  factors  that  precede  it — 
economic  development  of  the  people  upon  the  develop- 
ment of  the  natural  resources  and  taxing  practice  upon 
both. 

The  collection  of  public  revenue  in  Mexico  during  the 
colonial  period  was  not  according  to  any  well  thought- 
out  plan  as  to  where  the  burden  should  lie.  There  was 
no  taxing  system  properly  so  called,  but  the  govern- 
ment merely  laid  its  hands  on  the  sources  of  revenue 
from  which  returns  could  be  secured  most  easily.  Tax 
collection  was  haphazard;  it  affected  persons,  articles, 
and  places  that  could  be  easily  reached.  Opportunism 
and  not  a  fair  distribution  of  burden  was  its  guide,  and 
many  of  the  levies  were  thoroughly  uneconomic  and 

94 


PUBLIC  INCOME  AND  EXPENDITURE      95 

checked  progress  even  in  the  lines  Spain  wished  to 
encourage. 

Since  foreign  commerce  did  not  grow  and  could  not 
yield  heavily,  internal  commerce  was  forced  to  make 
payments  at  internal  customs  houses,  which  beyond 
doubt  kept  back  Mexican  economic  progress. 

Nevertheless  it  is  easy  to  criticize,  but  hard  to  see 
what  other  method  could  have  been  pursued  by  Spain. 
Her  hold  over  the  country  was  after  all  so  far  from 
that  which  under  modern  conditions  is  possible,  the 
transportation  system  was  so  poor,  and  the  persons 
upon  whom  she  could  rely  for  honest  appraisements 
and  collections  so  few,  and  at  best  so  unfitted  to  deal 
with  the  problems  that  faced  the  colony,  that  while  all 
can  see  that  the  taxing  methods  used  were  unfortunate, 
it  is  harder  to  state  what  could  have  been  better  adopted 
under  the  then  existing  conditions. 

There  were  four  classes  of  taxes  in  the  Spanish 
regime. 

1.  Taxes  that  were  sent  back  to  Spain,  such  as  those 
on  quicksilver  and  tobacco. 

2.  Special  taxes,  the  tenths,  the  ecclesiastical  sub- 
sidy, and  a  few  others  of  like  nature,  which  were  destined 
to  particular  uses  and  not  available  as  general  income. 

3.  Another  class  was  separate  incomes  known  as 
ajenos.    Such  were  the  Pious  Funds  of  the  Calif ornias, 
the  taxes  on  pawn  shops,  income  from  prohibited  liquors, 
and  certain  levies  on  mining.    These  were  not  resources 
that  were  covered  into  the  treasury.    Some  of  them  were 
collected,  however,  by  the  administrative  officers  and 
spent  by  the  government  directly. 


96    MEXICO  AND  ITS  RECONSTRUCTION 

4.  Finally  there  were  the  levies  classed  as  common 
taxation.  They  did  not  differ  in  nature  from  the  fore- 
going but  they  were  the  source  of  the  public  treasury 
income  from  which  the  general  colonial  expenses  must 
be  paid.  These  taxes  themselves  fall  into  classes,  those 
on  the  production  of  metals,  especially  silver  and  gold, 
formed  an  important  part  of  the  total.  There  were 
taxes  on  other  products,  the  entry  or  production  of 
which  could  be  easily  controlled  such  as  salt  and  silk, 
powder  and  pulque.  Stamp  taxes  on  business  docu- 
ments and  many  others,  paper  taxes,  anchorage  dues, 
and  taxes  on  commerce  for  maintaining  or  building  cer- 
tain fortifications  were  included  in  the  list.  Lotteries 
were  taxed,  and  there  were  some  unimportant  returns 
from  levies  on  land.  Highly  important  were  the  alca- 
balas,  the  taxes  on  internal  commerce. 

When  the  country  won  its  independence  from  Spain, 
the  public  treasury  was  empty  and  private  property 
burdened  by  the  destruction  that  had  occurred  during 
the  struggle.  Some  of  the  taxes  mentioned,  especially 
those  in  the  first  classes,  were  abolished  but  there  was 
no  general  reform.  The  problem  continued  to  be  how 
to  get  income  to  run  the  government,  rather  than  the 
ideal  way  in  which  to  get  it.  Many  of  the  old  taxes 
were  continued,  although  they  had  long  been  a  source 
of  complaint.  Before  any  comprehensive  reform  could 
be  put  into  operation  the  Mexicans  had  begun  the  long 
series  of  internecine  conflicts  that  kept  them  too  busy 
to  consider  tax  laws  except  as  a  means  of  satisfying  the 
immediate  needs  of  the  government.  In  fact,  it  is  not 
possible  to  ascertain  either  the  amounts  collected  or  all 


PUBLIC  INCOME  AND  EXPENDITURE      97 

the  tax  laws  that  were  nominally  in  force  in  the  period 
following  the  winning  of  independence. 

The  tobacco  tax  under  the  republic  went  into  the 
national  treasury.  Stamp  taxes  were  continued,  alca- 
balas  remained  one  of  the  most  important — in  some 
years  far  the  most  important — source  of  revenue.  Bul- 
lion and  pulque  taxes  were  kept  up.  In  general,  the 
old  Spanish  system  was  continued,  as  was  to  be  ex- 
pected.1 

A  review  of  the  measures  adopted  to  increase  the 
public  revenue  in  the  next  half  century  of  Mexican  his- 
tory reveals  no  policy.  There  were  numerous  tariffs, 
some  of  which  declared  for  developing  local  industry. 
Some  progress  was  made  in  doing  so  in  a  few  lines. 
There  were  scattered  efforts  to  reduce,  and  later  to 
abolish,  the  alcabala  taxes  but  revolutions  overturned 
all  efforts  for  financial  reform  and  made  revenue  of  the 
highest  importance  at  the  same  time  that  they  made  it 
harder  to  secure.  This,  of  course,  was  at  the  bottom 
of  the  repeated  default  on  foreign  loan  interest  pay- 
ments, already  noted,  and  the  reason  why  independence 
seemed  to  outsiders  so  fruitless  of  economic  and  cultural 
advance. 

In  fact,  the  struggle  for  a  sufficient  income  to  pay 
the  foreign  debt  service  and  leave  a  working  balance 

XA  discussion  of  the  tax  system  under  Spain  and  in  the  early 
years  of  independence  is  found  in  Memoria  de  hacienda  y  credito 
publico  .  .  .  1  de  Julio  de  1910  a  30  de  Junio  de  1911,  Mexico, 
1912,  p.  210  et  seq.  See  also  W.  F.  McCaleb,  The  Public  Finances 
of  Mexico,  New  York,  1921,  the  most  detailed  review  of  this  field 
in  English. 


98    MEXICO  AND  ITS  RECONSTRUCTION 

for  the  development  of  the  country  extended  well  into 
the  Diaz  regime.  When  at  last  order  was  established, 
the  group  in  charge  of  the  government  gradually  came 
to  realize  that  transportation  must  be  improved  if  the 
country  was  to  be  put  in  touch  with  the  outside  world 
and  to  develop  a  foreign  trade  that  could  assist  in  put- 
ting it  on  an  economically  sound  basis.  The  policy  of 
encouraging  railroad  building  was  adopted  and  develop- 
mental projects  of  other  kinds  were  also  given  public 
support. 

To  what  extent  such  plans  justify  themselves  depends 
on  the  rapidity  with  which  the  country  adjusts  itself 
to  new  conditions.  It  was  far-seeing  statesmanship  to 
put  off  the  day  when  a  balanced  budget  could  be  secured 
if  a  rapid  expansion  of  national  economic  power  could 
be  obtained  thereby,  but  for  no  nation  is  it  possible  in- 
definitely to  cover  annual  deficits  by  loans,  especially 
when  the  interest  on  such  loans  is  high  as  is  regularly 
the  case  in  undeveloped  regions.  Mexico  wisely  decided 
to  take  the  risk  of  increasing  for  the  time  being  the 
national  obligations  in  order  to  increase  the  national 
wealth  and  through  it  the  financial  ability  of  the  gov- 
ernment. 

By  the  early  '90s,  when  a  period  of  financial  stress 
was  affecting  the  whole  continent,  the  railway  mileage 
had  been  greatly  increased.  Subventions  had  pushed  up 
the  obligations  of  the  government  and  those  in  power 
had  to  consider  whether  it  was  not  time  to  wait  before 
contracting  further  debts  until  the  country  should  have 
responded  more  fully  to  the  stimulus  of  its  new  trans- 
portation facilities  and  the  resulting  contact  with  the 


PUBLIC  INCOME  AND  EXPENDITURE      99 

outside  world.  The  foreign  commerce  and  the  federal 
income  had  almost  trebled  in  the  12  years  preceding 
July,  1892,  but  recurring  deficits  made  conservatism  in 
public  expenditure  wise.  "It  is,  therefore,  indispensa- 
ble" "to  summon  the  determination  to  make  our  bud- 
gets balance"  declared  the  treasury  officials,  "making, 
on  the  one  hand,  all  the  economies  compatible  with  the 
necessity  of  preserving  the  public  and  on  the  other  in- 
creasing the  taxes  as  far  as  the  crisis  through  which 
the  nation  is  passing  will  permit."  "The  wise  and  far- 
seeing  public  policy  indicates  the  necessity  of  holding 
in  the  granting  of  subventions  .  .  .  and  waiting  for 
some  time  until  the  horizon  clears."  2 

But  to  secure  the  advantages  made  possible  by  the 
railroads  one  important  change  in  taxing  policy  was 
seen  to  be  needed  even  with  the  adoption  of  this  more 
conservative  program,  that  was  the  abolition  of  the  in- 
ternal customs  houses  at  which  were  collected  the  alca- 
balas.  Whatever  apology  could  be  made  for  such  taxa- 
tion in  the  colonial  era  it  was  now  thoroughly  indefensi- 
ble. The  constitution  of  1857  had  done  away  nominally 
with  taxes  of  this  sort  but  the  various  ministers  of  the 
treasury  had  not  dared  to  put  the  rule  into  effect.  In 
1892  the  federal  treasury  was  still  receiving  $2,000,000 
from  the  tax,  an  income  which  in  the  Mexican  budget 
of  that  time  was  apologized  for  because  it  was  "of  con- 
siderable size,  established  for  several  centuries,  and  ac- 

2  Memoria  de  hacienda  y  credito  publico  .  .  .  1  de  Julio  de  1891 
to  30  de  Junio  de  1892,  Mexico,  18Q2,  pp.  1-15,  contains  a  discus- 
sion of  this  policy.  A  balanced  budget  was  secured  in  1895,  the 
first  since  1822. 


100    MEXICO  AND  ITS  RECONSTRUCTION 

cepted  by  the  country."  Nevertheless  the  economic 
inadvisability  of  continuing  the  levies,  which  were  such 
a  serious  drag  on  commerce,  was  so  plain  that  the  gov- 
ernment undertook  their  prompt  abolition,  a  move  that 
subsequent  experience  fully  justified. 

The  federal  taxing  system  underwent  but  slight  mod- 
ification in  the  Diaz  regime.  The  increase  of  income 
arose  not  so  much  from  the  creation  of  new  taxes  as 
from  the  increased  receipts  from  old  ones.  From  1876 
to  1892  no  changes  were  made.  The  sources  of  income 
were  first  and  most  important  the  duties  on  imports 
and  exports.  These  always  have  been  the  greatest  con- 
tributors to  Mexican  revenue.  Next  in  importance  were 
the  stamp  taxes  levied  on  all  sorts  of  business  transac- 
tions, contracts,  sales,  receipts,  leases,  promissory  notes, 
bills  of  exchange,  and  the  like.  These  two  sorts  of  taxes 
together  yielded  well  over  four-fifths  of  the  total  rev- 
enue. Import  and  export  duties  alone  made  up  about 
three-fifths. 

Among  the  minor  sources  of  income  the  most  im- 
portant were  those  from  such  things  as  lotteries,  tele- 
graphs, mines,  and  the  post  office.  These  were  about 
10  per  cent  of  the  entire  collections.  Direct  taxes 
known  as  predial,  professional,  and  license  taxes  yielded 
about  three  per  cent  and  the  octroi  a  similar  amount. 
In  1892-3  a  few  other  minor  imposts  were  created  by 
law  and  later  Congresses  added  a  few.  To  the  end  of 


8  Ibid.,  pp.  11-15.  See  also  M.  Romero,  "Wages  in  Mexico," 
published  in  Commercial  Information  Concerning  the  American  Re- 
publics and  Colonies,  1891,  Bulletin  No.  41,  Washington,  1892. 


PUBLIC  INCOME  AND  EXPENDITURE    101 

the  Diaz  regime,  however,  there  was  no  general  revision 
of  the  taxing  system.4 

In  1902  steps  were  taken  to  protect  the  public  rev- 
enue against  the  consequences  of  fluctuation  in  the  value 
of  silver.  The  rate  of  exchange  for  the  foreign  debt 
services  was  fixed  in  the  years  following  the  greatest  fall 
in  the  price  of  silver,  1892-5,  to  allow  gold  100  per  cent 
premium.  Silver  later  went  down  still  further,  the  pre- 
mium on  gold  rising  to  150  per  cent.  The  actual  in- 
come of  the  country  collected  in  silver  shrank  propor- 
tionately whenever  it  was  necessary  to  make  payments 
on  a  gold  basis.  It  was  decided,  therefore,  to  reckon  the 
import  taxes  not  in  silver,  at  their  face,  but  in  the  equiv- 
alent of  the  rate  in  gold  at  a  fixed  exchange  rate — 220 
per  cent.  The  amount  of  any  tax  was  then  reconverted 
into  silver  pesos  at  the  prevailing  rate  of  exchange  of 
the  day.5 

The  policy  of  the  Diaz  government  in  the  manage- 
ment of  the  financial  affairs  of  Mexico  was  fully  justi- 
fied by  the  result.  Income  finally  came  to  exceed  ex- 
penditure, and  the  adjustment  of  the  tariff  system  re- 
moved the  effect  of  the  shifting  value  of  silver  on  the 
total  customs  receipts.  By  the  middle  '90s  the  ordinary 
income  showed  a  good  margin  above  ordinary  expendi- 
ture, a  condition  which  continued  through  the  rest  of  the 


*  A  review  of  the  taxing  system  in  the  early  '90s  is  found  in  Luis 
Pombo,  Mexico:  1878-1892,  Mexico,  1893,  p.  95  et  seq. 

6  Put  in  force  November  25,  1902,  Memoria  de  hacienda  y  credito 
publico  .  .  .  de  1  de  Julio  de  1902  a  30  de  Junto  de  1903,  Mexico, 
1907,  pp.  7-8. 


102    MEXICO  AND  ITS  RECONSTRUCTION 

Diaz  regime.8     The  adoption  of  the  gold  standard  in 
1905  still  further  stabilized  the  financial  system. 

The  public  finances,  however,  were  still  far  from  a 
satisfactory  condition  from  a  social  point  of  view.  The 
balances  were  made  favorable  only  by  neglect  of  some 
of  the  greatest  social  needs  of  the  republic.  Education 
was  still  backward,  sanitation,  outside  the  big  towns, 
was  poor,  and  transportation  facilities,  in  spite  of  the 
great  advance  over  the  pre-railroad  period,  were  still 
inadequate.  The  taxes  were  not  adjusted  in  such  a  way 
as  to  give  proper  impulse  to  national  industrial  develop- 
ment nor  to  stimulate  the  exploitation  of  the  country's 
agricultural  resources.  A  system  of  land  taxation  that 
would  fall  upon  unproductive  holding  of  large  estates 
was  still  lacking.  There  was  need  of  a  large  amount 
of  social  legislation  so  adjusted  that  the  republic  would 
become  a  truly  modern  nation  throughout  her  national 
life.  This  was  a  task  immensely  greater  than  the  finan- 
cial rehabilitation  which  the  government,  under  the  dic- 
tatorship, had  so  successfully  carried  out.  It  was  a  task 
in  which  but  little  progress  had  been  made  and  which 
the  government,  in  spite  of  the  evidence  so  clearly  pre- 
sented in  the  reports  of  many  of  its  officials,  had  never 
resolutely  faced. 

Whether  the  old  regime  could  have  carried  through 
the  great  socialization  program  that  was  needed  may 
be  doubted.  The  dictatorship  had  not  shown  itself 
capable  of  encouraging  the  broadening  of  privileges  and 

6  See  tabulation  in  Memoria  de  "hacienda  y  credlto  publlco,  cor- 
respondiente  al  ano  enconomico  de  1  de  Julio  de  1907  a  30  de  Junio 
de  1908,  Mexico,  1909,  p.  5, 


PUBLIC  INCOME  AND  EXPENDITURE    103 

opportunities  even  within  the  small  circle  of  whose  who 
were  its  servants.  There  can  he  no  doubt  that  the  fail- 
ure to  face  the  great  humanitarian  work,  which  should 
have  accompanied  the  economic  regeneration  of  the 
country,  was  the  greatest  weakness  of  the  old  regime 
and  the  fundamental  cause  of  its  spectacular  and  tragic 
downfall. 


CHAPTER   IX 

THE  MEXICAN  LABORER 

THE  Aztec  civilization,  which  the  Spaniards  found 
in  Mexico  at  the  time  of  the  conquest,  depended  pri- 
marily upon  the  labor  of  the  hands  of  the  people.  Do- 
mestic animals,  as  in  all  America,  were  conspicuous 
by  their  absence.  Agriculture  was  of  the  most  primi- 
tive sort. 

One  of  the  most  important  changes  in  the  economic 
life  of  the  country  brought  by  the  Spanish  conquest, 
greatly  increasing  the  labor  power  of  the  country,  was 
the  introduction  of  European  foodstuffs  and  domestic 
animals.  European  cereals  and  other  foods  were  intro- 
duced in  the  highland  regions  and  the  horse,  burro, 
sheep,  and  swine  became  common  elements  in  the  life  of 
the  country.  Chicken  raising  spread  rapidly,  wool  be- 
came important  as  a  material  for  clothing.  Later 
potato  culture  was  extended  and  rice  and  coffee  were 
introduced.  European  methods  improved  the  yield  of 
the  mines  and  minted  coins  made  exchange  easier  and 
gave  a  new  impulse  to  the  weak  local  commerce.1 

In  spite  of  the  introduction  of  these  favorable  ele- 
ments the  life  of  Mexico  did  not  change  as  much  as 

1 A  good  description  of  the  changes  in  the  life  of  the  people 
introduced  by  the  Spanish  conquest  is  found  in  Karl  von  Sapper, 
Wirtschaftsgeographie  von  Mexico,  1908. 

104 


THE  MEXICAN  LABORER  105 

might  have  been  expected.  Mining  drew  attention  away 
from  other  developments,  such  as  agriculture,  but  most 
of  all  the  trade  policy  of  the  mother  land  kept  the  coun- 
try in  a  backward  condition.  It  shut  out  the  foreigner 
who,  by  his  example,  might  have  stimulated  the  Indian 
to  adopt  a  civilization  in  which  industry  played  a  greater 
part  than  in  his  own.  It  restricted  the  foreign  trade 
that  would  have  opened  up  the  natural  resources  and 
that  would  have  created  greater  necessity  for  labor  and 
would  have  increased  its  reward.  When  the  Spanish 
restrictions  were  removed,  the  influences  that  formerly 
hindered  development  largely  vanished,  but  the  country 
did  not  advance.  Disorder,  which  discouraged  capital 
investment  and  robbed  the  workman  of  the  fruit  of  his 
labor,  retarded  progress.  Not  until  after  half  a  cen- 
tury of  intermittent  revolutions  did  Mexico  right  itself. 
Under  the  discipline  of  a  strong  government  it  grad- 
ually removed  the  more  important  survivals  of  the  anti- 
quated Spanish  commercial  policy,  and  the  republic  for 
the  first  time  came  into  real  contact  with  the  current 
of  world  economic  developments. 

For  these  reasons  the  Mexican  laborer — as  a  laborer 
— has  only  recently  had  a  chance  to  prove  his  merits  and 
even  now  his  possibilities  cannot  be  definitely  stated.2 

The  estimates  of  the  Mexican  workman  given  by  those 
who  have  employed  him  in  large  numbers  vary  as  greatly 
as  the  Mexican  himself  varies.  In  some  railroad  con- 
struction wrork  overseers  who  have  had  wide  experience 
with  all  kinds  of  unskilled  labor  declare  him  to  be  the 

2  See  Wallace  Thompson,  The  People  of  Mexico,  New  York, 
1921,  pp.  315-348. 


106    MEXICO  AND  ITS  RECONSTRUCTION 

best  material  they  have  ever  had  to  deal  with  for  doing 
rough  work.  Others  think  him  "next  after  the  Irish," 
"fully  the  equal  of  the  Italian,"  and  "as  good  as  any 
immigrant  labor  I  ever  dealt  with."  Estimates  of  less 
favorable  character  are  quite  as  numerous,  and  the  Mex- 
ican employer  appears  to  have  quite  as  much  to  say 
about  the  shortcomings  of  the  native  laborer  as  does 
the  foreigner.  The  fact  that  the  estimates  of  his  abil- 
ity are  not  regional,  that  there  is  no  ethnological  nor 
sociological  unity  among  the  population,  and  that  some 
foreign  and  some  Mexican  employers  have  marked  suc- 
cess in  using  native  labor  in  districts  where  others  find 
it  very  inefficient  makes  it  hard  to  arrive  at  any  esti- 
mate of  the  Mexican  as  a  laborer  that  is  fair. 

In  whatever  part  of  the  country  that  is  under  discus- 
sion the  laborer  is,  as  a  rule,  an  Indian  laborer.  He 
is  the  fulcrum  of  Mexican  society.  As  one  of  the  most 
thorough  of  Mexican  students  says,  "Amidst  the  most 
terrible  sufferings  and  crushed  by  all  sorts  of  hardship 
the  indigenous  population  is  sustaining  us,  socially 
speaking :  it  carries  on  the  agricultural  labor  throughout 
the  Republic,  works  the  mines,  and  effectuates  all  hard 
and  heavy  toils."  "Our  subordination  to  the  indigenes 
is  so  patent  that  our  actual  existence  depends  exclu- 
sively on  them." 

The  work  that  the  Indian  has  been  called  upon  to  do 
thus  far  has  been,  as  a  rule,  such  as  to  test  his  physical 
endurance  and  industry  but  has  given  him  little  oppor- 
tunity to  show  his  abilities  in  skilled  trades.  The  most 

3  Justus  Sierra,  editor,  Mexico,  Its  Social  Evolution,  vol.  I,  p.  30. 


THE  MEXICAN  LABORER  107 

important  exception  is  found  in  the  textile  mills.  There 
ignorance  has  stood  in  the  way  to  prevent  advance  to 
responsible  positions.  In  the  few  cases  where  this  has 
not  been  the  case  the  better  paid  places  have  not  infre- 
quently been  reserved  for  foreigners  by  the  manage- 
ment or,  if  Mexicans  were  put  into  places  of  responsi- 
bility, they  were  given  lower  wages  than  were  paid  to 
Europeans  doing  similar  work.  The  success  of  certain 
of  the  native  employees  in  the  face  of  these  difficulties 
shows  that  some,  at  least,  have  aptitude  for  the  skilled 
trades.  There  is  no  doubt  that  even  in  the  textile  mills 
the  abilities  of  the  native  population  have  not  been  fully 
tried  out  in  the  past. 

The  government  has  done  little  to  furnish  education 
which  would  develop  the  latent  industrial  ability  of  the 
people.  "By  the  change  of  regime  in  the  present  cen- 
tury the  indigenes  have  made  no  advance,  they  have 
only  changed  their  tutors  and  tutor  Congress,  to  tell 
the  truth,  has  done  less  for  them  than  the  tutor  Vice- 
roy." * 

Under  these  conditions  it  is  evidently  unfair  to  judge 
what  the  Mexican  laborer  can  do  from  what  he  has  done. 
He  has  never  had  a  chance  to  prove  his  worth  and  his 
cause  has  been  an  unpopular  one  even  in  his  own  coun- 
try. The  ruling  class  have  consistently  alleged  his  great 
possibilities  and  especially  in  late  years  not  a  few,  when 
comparing  themselves  to  foreigners,  have  developed  a 
sort  of  Indian  cult  and  have  professed  themselves  of 

*  Ibid.,  p.  31.     See  also  Alberto  Robles  Gil,  Memoria  de  la  sec- 
retaria  de  fomento  presentada  al  congreso  de  la  union,  Mexico, 
p.  500. 


108    MEXICO  AND  ITS  RECONSTRUCTION 

Indian  blood  and  declared  themselves  proud  of  their  in- 
heritance. Nevertheless,  in  domestic  politics,  the  Indian 
has  been  a  subject  of  general  neglect.  Mexico  has  rec- 
ognized that  her  greatest  problem  is  at  bottom  a  race 
problem,  but  she  has  made  only  the  feeblest  of  efforts 
for  its  solution. 

The  criticisms  of  the  Indian  laborer  by  his  employers 
are  those  frequently  alleged  against  the  colored  races, 
especially  those  living  under  tropical  or  semitropical 
conditions.  The  Indian  laborer  is  alleged  to  be  lazy, 
of  few  wants,  preferring  a  low  standard  of  life  with 
little  exertion,  physical  or  mental,  to  hard  work  and 
the  satisfaction  of  new  desires.  He  is  stolid,  taciturn, 
melancholy,  fatalistic,  deceitful,  and  unambitious.  He 
is  declared  childlike,  quick  to  anger,  devoted,  and  re- 
vengeful. With  other  peoples  at  a  similar  stage  of 
development  he  shares  a  fondness  for  strong  drink. 
"He  never  becomes  an  initiator,  that  is  to  say,  an  agent 
of  civilization  .  .  .  the  native  people  is  a  static  peo- 
ple." 5  Unlike  some  of  the  native  population  of  the 
United  States  he  is  said  to  be  usually  docile,  easy 
to  handle  if  his  prejudices  are  not  offended,  and,  as  a 
rule,  not  a  lover  of  fighting  for  its  own  sake.  Custom 
plays  a  large  part  in  his  life  and  he  yields  to  new 
influences  but  slowly.  Though  there  are  those  whose 
experience  seems  to  prove  the  contrary,  it  is  the 
general  testimony  that  the  native  lacks  powers  of 
sustained  attention  and  industry.  He  is  easily  di- 
verted from  the  task  in  hand.  He  shows,  in  short,  in 

8  Justus  Sierra  quoted  in  Luis  Pombo,  Mexico,  1876-1892,  Mex- 
ico, 1893,  p.  7. 


THE  MEXICAN  LABORER  109 

the  work  that  he  undertakes,  an  immaturity  of  char- 
acter comparable  to  that  of  a  child.  These  character- 
istics are  emphasized  in  the  hot  regions.8 

Other  ethnic  elements  besides  the  Indian  play  an  un- 
important part  in  the  manual  labor  supply  of  Mexico. 
The  mestizo  population,  a  growing  proportion  of  the 
whole,  has  not  turned  to  agricultural  or  industrial  pur- 
suits. What  education  it  has  received  has  turned  its 
attention  to  the  "polite  professions"  rather  than  the 
more  fundamental  occupations.  That  such  is  the  case 
is  one  of  the  most  unfortunate  features  of  Mexican  life. 
There  is  no  economic  bridge  between  the  laboring  classes 
and  those  who,  from  a  false  perspective,  believe  that 
working  with  their  hands  is  beneath  them.  The  educa- 
tion which  the  state  has  provided  is  literary,  the  envied 
careers  are  those  in  the  law  courts  and  diplomatic  circles. 
Even  those  who  receive  training  in  engineering,  agri- 
culture, and  like  careers  too  frequently  consider  them- 
selves qualified  thereby  for  government  positions  or  for 
the  responsibilities  of  directors  whose  work  is  sharply 
cut  off  from  actualities. 

From  these  conditions  results  one  of  the  most  strik- 
ing contradictions  in  Mexican  life.  The  mestizos  have 
developed  as  the  owners  of  the  greater  number  of  small 
properties  in  the  republic,  they  have  monopolized  many 
lines  of  small  trade,  they  are  the  middlemen.  They 
hold  the  great  majority  of  public  offices.  But  they  have 
no  unity  of  interest  and  feeling  with  the  laboring  classes. 

6  See  on  this  point  Alberto  Robles  Gil,  op.  cit.,  p.  94.  The  "vig- 
orous" element  in  the  hot  zone  are  one-twentieth  of  the  population. 
In  the  temperate  regions  they  are  one-tenth. 


110    MEXICO  AND  ITS  RECONSTRUCTION 

Mexico,  it  is  true,  has  no  hard  and  fast  race  line  such  as 
is  found  in  the  United  States.  It  has  a  line  of  economic 
and  social  demarkation  which  is  no  less  unfortunate. 
"Ever  since  the  independence  the  Mexican  mestizos  and 
the  Creoles  .  .  .  divided  into  two  parties,  both  of  them 
distanced  from  the  nature  of  things  because  of  their 
ignorance  of  the  actual  world;  not  knowing  the  true 
needs  of  Mexican  society"  have  "continued  to  agitate 
it"  but  have  not  established  Mexico  upon  a  sound  eco- 
nomic, social,  and  political  foundation.7 

Foreigners,  as  an  element  in  the  labor  supply  and  in 
office  holding,  can  be  disregarded.  They  have  devoted 
themselves  to  trade,  banking,  and  the  development  of 
the  natural  resources  of  the  country,  the  latter  almost 
exclusively  through  the  use  of  the  local  labor.  They 
represent  a  part  of  Mexican  wealth  disproportionate  to 
their  number  and  their  enterprises  have  an  important 
influence  on  the  economic  position  of  the  country  and  its 
inhabitants,  but  they  do  not  form  an  important  part 
of  the  labor  supply. 

If  the  average  Mexican  laborer  of  the  present  day  or 
of  a  generation  ago  is  compared  to  the  American 
laborer,  he  makes  no  favorable  showing.  For  the  dollar 
of  wage  received  he  does  not  yield  more  than  the  highly 
paid  worker  in  the  United  States.  The  chief  causes 
advanced  in  explanation  of  this  fact  are  that  he  is  poorly 
fed,  poorly  educated,  less  ambitious,  and  in  large  areas 
of  Mexico  less  able  to  work  because  of  climatic  condi- 
tions. The  plateaus  are  so  high  that  the  rarefied  air 

*  Austin  Aragon  in  Justus  Sierra,  op.  cit.,  p.  81. 


THE  MEXICAN  LABORER  111 

makes  sustained  effort  difficult  and  the  atmosphere  of 
the  lowlands  is  so  hot  and  humid  that  the  laborer  cannot 
endure  the  continuous  physical  labor  of  which  men  of 
northern  lands  are  capable.8  Some  of  these  are  disad- 
vantages that  can  be  overcome.  Some  are  inherent  in 
the  conditions  under  which  the  Mexican  laborer  lives. 

Making  all  due  allowances  for  the  disadvantages 
under  which  it  works,  it  is  clear  that  the  laboring  popu- 
lation of  Indian  blood  is  one  that  reacts  but  slowly  to 
new  surroundings  and  one  the  abilities  of  which  are  still 
to  be  determined.  The  mestizo  class,  which  is  gaining 
in  numbers  as  compared  to  the  pure  Indian,  will  sooner 
or  later  be  forced  to  take  a  larger  part  in  the  labor  of 
the  community.  The  Mexican  Indian  as  an  Indian 
seems  destined  to  disappear  by  absorption.  Even 
though  under  the  stimulus  of  foreign  example  and  eco- 
nomic compulsion  he  should  take  on  European  habits 
of  life,  rapidly  develop  new  wants,  and  become  a  greater 
factor  in  the  national  life,  there  is  little  chance  of  his 
surviving  as  an  Indian.  The  chance  would  be  less  per- 
haps than  if  he  continued  his  present  mode  of  life,  for 
his  blending  with  the  rest  of  the  population  would  prob- 
ably be  hastened  by  unity  of  economic  interest. 

Mexico  is  now  predominantly  a  mixed  blood  state 
and  it  seems  probable  will  become  more  so.  The  Mexi- 
can laborer  of  the  future,  it  appears,  will  be  a  mestizo 
and  not  an  Indian,  a  condition  that  will  be  hastened 
by  the  absence  of  the  social  cleavage  on  racial  lines, 

8  M.  Romero,  "Wages  in  Mexico,"  in  Commercial  Information 
Concerning  the  American  Republics  and  Colonies ,  1891,  Bulletin, 
No.  41,  Washington,  1892. 


which  is  found  elsewhere.  The  aboriginal  races,  which 
formed  so  important  a  factor  in  the  early  history  of  the 
United  States,  have  disappeared  as  an  important  factor 
in  the  national  life  by  a  process  of  elimination,  those 
of  Mexico,  which  have  been,  until  now,  the  foundation 
on  which  the  state  has  been  built,  will  disappear  by  inter- 
marriage. 

What  effect  this  development  will  have  upon  Mexi- 
can economic  and  political  life  it  is,  of  course,  impossible 
to  say.  Whether  through  faulty  education  or  other 
causes,  the  mixed  bloods,  up  to  the  present,  have  not 
shown  themselves  an  industrially  able  population.  In 
politics  they  have  been  wonderfully  facile  and  disap- 
pointingly unstable.  Whatever  the  changes  that  the 
revolution  brings  in  the  labor  conditions  of  Mexico  may 
be— whether  the  Indian  for  the  time  being  comes  to 
play  a  more  or  a  less  important  part  in  the  national  life 
and  whether  or  not  the  mestizo  rises  to  his  opportunity 
— it  is  clear  that  Mexican  labor  problems  will  be  in  the 
future,  as  they  have  in  the  past,  to  a  large  extent,  race 
problems.  They  must  depend  for  the  success  of  their 
solution  upon  the  degree  to  which  the  Indian,  and  for 
the  future  the  mestizo,  population  show  themselves 
adaptable  to  the  demands  of  industry. 

It  is  not  fair,  however,  to  assume,  as  is  often  done, 
that  given  the  chance  to  develop  wants  the  Indian  and 
mestizo  populations  have  shown  no  tendency  to  do  so. 
In  fact,  the  Indian  has  been  brought  into  contact  with 
the  habits  of  civilized  life  so  casually,  if  at  all,  that  his 
adaptive  impulses,  which  appear  naturally  slow,  have 
been  but  feebly  aroused.  The  mestizo  has  taken  on  a 


113 

surface  culture  but  has  missed  the  lesson  that  civiliza- 
tion means  work  and  responsibility  for  those  who  do 
not  labor  with  their  hands  as  well  as  for  those  who  do. 
He  has  developed  new  wants  but  they  have  not  sunk 
deeply  enough  into  his  nature  to  make  him,  in  fact  as 
well  as  in  appearance,  a  person  of  Western  European 
civilization. 

Along  the  railroads  and  at  the  seaports,  wherever 
the  currents  of  commerce  have  penetrated,  demands  for 
the  simpler  and  cheaper  manufactured  articles  have 
developed,  and  if  education  and  economic  changes, 
which  would  open  greater  possibilities  of  economic  in- 
dependence, were  to  reach  the  people,  they  would  doubt- 
less progress  faster  toward  a  European  standard  of 
wants.9  Until  those  elements  that  a  modern  state  con- 
siders it  essential  to  furnish  its  citizens  are  introduced 
in  Mexico,  it  will  be  too  soon  to  judge  what  the  capa- 
bilities of  the  local  population  are  and  the  degree  to 
which  they  will  be  able  to  keep  their  country  their  own 
— both  in  an  economic  and  a  political  sense. 

9  A  good  description  of  the  position  of  the  Indian  in  Mexican  life 
is  found  in  Luis  Pombo,  op.  cit.,  p.  7  et  seq. 


CHAPTER   X 

THE  MEXICAN  LABORER:    HIS  CONTRACT 

ONE  of  the  greatest  handicaps  to  the  progress  of  the 
laboring  classes  especially  among  the  less  advanced 
populations  is  the  "lack  of  wants."  In  highly  devel- 
oped industrial  communities  a  sudden  increase  of  in- 
come for  the  laborer  does  not  result  immediately  in  a 
wise  expenditure  of  his  surplus  for  the  general  better- 
ment of  his  standard  of  life.  But  where  the  examples 
of  those  who  have  had  greater  opportunities  and  greater 
income  are  constantly  before  the  worker  and  his  family, 
the  transit  from  the  old  to  a  new  standard  comes  with 
no  great  delay.  New  desires  are  felt  which  demand  all 
the  increase  of  income  and  more.  Thus  occurs  the  con- 
stant and  insistent  pressure  from  below  for  a  better 
standard  of  living,  which  is  so  marked  a  characteristic 
of  the  civilization  of  Western  European  peoples. 

But  in  tropic  or  semitropic  lands,  such  as  Mexico, 
the  conditions  that  surround  the  laborer  do  not  produce, 
or  at  least  have  not  heretofore  produced,  that  whole- 
some unrest  which  is  the  dynamic  element  in  countries 
less  favored  by  nature.  Life  is  too  easy.  Poverty  is 
always  near  but  actual  starvation  is  known  hardly  by 
report.  Contrasts  in  habits  of  life  outside  the  larger 
towns  are  not  so  great  as  to  furnish  incentive  to  enter- 
prise. The  working  man  feels  himself  a  part  of  the 
community  and  occupies  a  traditional  position  within 

114 


THE  LABOR  CONTRACT  115 

it.  He  is  not  conscious  of  great  wrongs  nor  disposed 
to  question  the  fitness  of  things  as  they  are. 

Nominally  all  labor  in  Mexico  has  been  free  during 
the  entire  life  of  the  republic,  but  the  desire  of  em- 
ployers to  secure  a  lever  by  which  the  Indian  could  be 
induced  to  work  brought  the  continuance  of  a  system 
inherited  from  colonial  times  which,  while  not  legally 
slavery,  had  to  a  large  degree  the  economic  effects  of 
a  slavery  system. 

In  this  as  in  many  other  matters  of  public  policy 
political  theory  outran  practice.  The  constitution  of 
1857  under  which  the  republic  continued  to  live  until 
the  adoption  of  that  of  1917  provided  that  "nobody 
should  be  obliged  to  render  personal  service  without 
proper  compensation  and  his  full  consent,"  and  pro- 
hibited laws  that  sought  to  recognize  contracts  involv- 
ing the  "loss  or  irreparable  sacrifice  of  the  freedom  of 
man  through  work,  education,  or  religious  vows."  These 
clauses  were  considered  to  abolish  the  prevailing  peon- 
age system.  On  September  25,  1873,  the  rule  was 
made  to  read:  "The  State  cannot  allow  the  fulfillment 
of  any  agreement,  contract,  or  covenant  which  may,  in 
any  manner  impair,  destroy,  or  irrevocably  sacrifice 
man's  liberty  either  through  work,  education,  or  reli- 
gious vows." 

Neither  clause  brought  a  change  in  fact.  Local  ef- 
forts to  make  the  law  square  with  practice  did  not  up- 

1  The  above  quotations  are  from  Ma  Has  Romero,  "Wages  in 
Mexico,"  published  in  Commercial  Information  Concerning  the 
American  Republics  and  Colonies,  1891,  Bulletin  No.  41,  Wash- 
ington, 1892. 


116    MEXICO  AND  ITS  RECONSTRUCTION 

root  the  well  established  characteristics  of  the  employ- 
ment contracts.  It  is  true,  of  course,  that  labor  con- 
ditions during  the  Diaz  regime  varied  widely  in  differ- 
ent parts  of  Mexico.  The  men  were  not  uniformly 
good  workers,  they  were  not  uniformly  content  with 
their  lot  as  they  found  it,  and  the  conditions  of  their 
employment  varied  with  the  traditional  arrangements 
observed  and  with  the  degree  to  which  foreign  influences 
had  come  in  to  upset  the  unprogressive  but  generally 
contented  habits  of  the  slow-moving  local  life.  But 
none  of  these  influences  created  a  general  demand  for 
betterment  of  the  condition  of  the  laborer.  The  labor 
problem  was  in  the  greater  part  of  the  republic  one 
which,  to  the  employer,  meant  how  to  get  labor,  not  how 
to  satisfy  the  demands  of  an  organized  labor  class. 

The  Mexican  government  has  never  had  a  thorough 
study  of  the  labor  conditions  among  its  own  people.  It 
does  not  know  officially  to-day  in  more  than  the  most 
general  way  the  usual  terms  of  contract,  the  wages,  or 
the  living  conditions  of  the  laboring  classes.  The  best 
picture  that  can  be  given  must  be  based  on  incomplete 
official  surveys  supplemented  by  the  observations  of 
travelers,  the  experience  of  the  many  foreigners  who, 
in  their  enterprises,  have  come  into  contact  with  the 
Mexican  peon,  and  the  testimony  of  those  who  have 
been  prominent  in  support  of  the  recent  labor  move- 
ment or  in  its  opposition.  In  the  years  1885-8  the  gov- 
ernment published  the  results  of  a  labor  survey  of  Mex- 
ico which  is  even  up  to  the  present  time  the  most  com- 
prehensive effort  of  the  sort  that  has  been  made  in  the 
republic.  Though  the  answers  to  the  questionnaires 


THE  LABOR  CONTRACT  117 

sent  out  are  by  no  means  of  even  merit,  they  give  a  fair 
picture  of  the  status  of  the  Mexican  laborer  in  the  early 
part  of  the  Diaz  period.2 

Complaints  concerning  the  condition  of  the  laborer 
were  even  at  this  early  time  frequent.  The  discussion 
shows  that  the  desire  for  change  did  not  come  from  the 
peons,  who  were,  in  fact,  then  and  later  as  a  class  un- 
protesting  and  fairly  well  satisfied.  The  labor  system 
was  criticized  rather  as  a  factor  in  the  national  life 
which  was  neither  economically  efficient  nor  one  which 
promoted  the  creation  of  an  independent  citizenship. 

The  reports  that  were  asked  from  the  officers  of  all 
the  states  and  their  subdivisions  reveal  a  surprising  va- 
riety of  customs  affecting  the  labor  contract.  There 
was  no  generally  accepted  system  of  peonage.  Rates 
of  pay  often  varied  greatly  in  communities  at  short  dis- 
tances from  each  other.  As  a  rule  the  contract  was  for 
shorter  periods  in  the  south  and  the  wages  were  better 
in  the  north.  The  enterprises  in  some  districts  fur- 
nished only  seasonal  employment  for  a  few  men  and 
employers  found  it  difficult  to  secure  help  even  on  these 
short-term  contracts.  In  other  cases  there  were  two, 
three,  and  even  four  different  kinds  of  servants  recog- 
nized, each  with  their  separate  wage  arrangements. 

In  some  communities  pay  was  by  the  task  or  by  the 
day  in  advance,  in  others  by  the  week  in  advance.  In 
others,  payment  came  at  the  end  of  the  period  of  serv- 

2  These  reports  were  published  in  great  detail  in  a  series  of  docu- 
ments with  slightly  varying  titles  in  1885-7.  The  general  title 
is  Informes  y  documentos  relatives  a  comercio  interior  y  exterior, 
agricultura  e  industries. 


118    MEXICO  AND  ITS  RECONSTRUCTION 

ice.  There  were  year,  two-year,  and  even  five-year  con- 
tracts. There  were  share  farmers  of  various  kinds  and 
casual  laborers.  The  longer  contracts  might  or  might 
not  involve  such  elements  as  ration,  the  furnishing  of 
tools,  clothes,  medicine,  housing,  and  a  large  number 
of  other  elements.  To  speak  of  Mexican  peonage  as  a 
system  was  to  use  a  misnomer.  Nothing  less  deserved 
the  name.  It  was  a  tissue  of  widely  varying  rules  partly 
resting  on  state  legislation  but  largely  on  local  custom, 
the  origin  of  which  was  not  found  in  written  law  even 
in  the  colonial  regime. 

Study  of  wage  rates,  though  they  are  carefully  re- 
ported in  the  inquiry  referred  to,  does  not  allow  defi- 
nite conclusions.  Actual  income  in  one  district  as  com- 
pared to  another  was  not  measured  by  the  money  wage. 
Ration  allowances,  land  for  the  peon's  use,  and  hunt- 
ing privileges  modified  conditions.  A  centavo  had  a 
very  different  value  in  Chiapas  from  that  which  it  pos- 
sessed in  Durango,  the  wants  of  the  peon  in  the  one  case 
were  fewer  than  in  the  second  and  he  would  stop  work- 
ing sooner,  no  matter  what  the  wage  offered. 

It  is  also  impossible  to  give  any  intelligent  discussion 
of  the  hours  of  labor  in  a  country  where  presence  on  the 
job  has  such  an  indefinite  relation  to  the  work  done. 
This  is  true  in  all  non-industrial  countries  in  which  there 
are  wide  variations  of  climatic  conditions.  The  peon 
started  work  in  many  districts  at  four  in  the  morning. 
He  finished  at  eight  at  night  or  later.  The  working 
hours  were  variously  reported  within  the  16-hour  period. 
Yet  the  number  of  Mexican  laborers  who  worked 
straight  through  the  reported  working  period  or  straight 


THE  LABOR  CONTRACT  119 

through  the  day,  except  for  meal  hours,  was  small  in- 
deed. There  were  rests,  lunch  periods,  siestas,  periods 
for  smoking,  and  the  unavoidable  interruptions  that 
seem  to  be  inherent  in  the  work  of  any  aboriginal  or 
semi-aboriginal  labor  group.  All  these  made  the  actual 
effective  labor  hours  much  less  than  their  nominal  total. 

There  were  so  many  variations  in  labor  conditions 
that  no  average  standard  can  be  discussed  without  de- 
stroying the  most  distinctive  feature  of  the  picture,  its 
variety.  Illustrations  from  the  south,  the  center,  and 
the  northern  part  of  the  country  at  various  periods  give 
a  fair  idea  of  the  sort  of  contrasts  encountered. 

In  Chiapas  in  the  Department  of  Pichucalco  in  the 
middle  '80s  the  laborers  were  of  three  classes:  free  and 
debt  servants  and  intermittent  workers.  The  first  re- 
ceived 25  centavos  and  subsistence,  or  38  to  50  centavos 
without  subsistence.  Such  servants  were  hard  to  find. 
Few  "liked  to  work  by  the  day." 

The  debt  worker  presented  himself  to  the  intending 
employer  and  received  an  advance  of  wages  and  a  so- 
called  card  account,  carta  cuenta,  stating  the  amount 
owed.  This  was  recognized  before  a  legal  authority, 
before  whom  was  also  drawn  up  a  statement  of  the 
term — regularly  one  or  two  years — for  which  the  man 
agreed  to  work  every  day  but  feast  days.  The  pro- 
prietor promised  to  pay  the  wages  agreed  upon,  fur- 
nish stipulated  food,  and  make  the  necessary  advances 
in  cash,  clothing,  and  tools.  Often  the  formal  legaliza- 
tion of  the  contract  did  not  take  place,  the  card  account 
being  issued  and  both  relying  on  custom  to  determine 
their  rights  and  duties.  The  services  of  the  wife  might 


120    MEXICO  AND  ITS  RECONSTRUCTION 

or  might  not  be  included  in  the  laborer's  contract. 
When  the  laborer  wished  to  move  to  another  farm,  he 
made  arrangements  with  its  owner  by  which  the  latter 
would  pay  the  former  employer  the  amount  of  the  labor- 
er's card  account.  The  man  was  then  transferred.  The 
advances  on  card  accounts  often  reached  500  pesos  or 
more.  The  wage  of  the  debt  laborers  in  cash  was  four 
pesos  a  month,  in  addition  to  which  they  received  500 
ears  of  corn,  20  pounds  of  beans,  salt,  house  rent,  medi- 
cines, and  two  bottles  of  alcohol. 

The  intermittent  workers  were  bound  to  work  only 
four  days  out  of  each  week.  They  received  lodging  and 
four  pesos  a  month  without  any  supplemental  allow- 
ances. 

In  other  parts  of  Chiapas  still  other  variants  were 
found.  In  some  districts  there  were  meseros,  or  month 
workers,  usually  Indians  who  owed  more  than  they 
could  pay.  Their  contracts  differed  from  those  of  the 
debt  servant  above  described  in  that  they  worked  one 
month  for  the  master  and  one  for  themselves.  They 
did  not  live  on  the  farm  but  in  their  own  homes,  which 
were  often  distant  from  the  place  of  work.  As  in  the 
case  of  the  other  debt  peons  the  master  assumed  their 
debt  and  paid  them  their  wages  and  a  ration  of  corn. 
Another  class  were  the  baldios,  who  lived  on  the  place 
but  worked  land  for  themselves,  built  their  own  houses, 
and  paid  from  two  to  four  days'  labor  per  month  for 
their  privileges.  They  were  under  obligation  to  work 
for  the  master  for  a  peso  or  nine  reales  a  week  when  he 
called  upon  them.  Occasionally  there  were  share  work- 
ers and  advance-payment  week  workers.  The  best  paid 


THE  LABOR  CONTRACT  121 

laborers  on  the  haciendas  were  a  class  called  punteros, 
a  sort  of  foremen  found  only  on  the  larger  places.  They 
distributed  the  tasks  of  the  day  and  themselves  worked 
with  the  group  of  men  of  which  they  were  given  charge. 

The  labor  difficulty  in  the  south  was  then  what  it  is 
to-day.  Life  was  too  easy  to  encourage  habits  of  indus- 
try. The  great  majority  of  the  population  were  In- 
dians who  felt  no  necessity  to  work.  Only  a  few  of 
the  native  towns  furnished  laborers.  The  people  of  the 
rest  of  the  towns  relied  on  their  corn  patches  and  hunt- 
ing for  their  livelihood.  In  the  average  case,  there  was 
little  oppression  possible  on  the  haciendas,  since  the  In- 
dian could  escape  and  the  arm  of  the  administration  was 
not  strong  enough  to  hold  him  to  his  duty.  The  land- 
owner had  to  do  the  best  he  could  to  keep  peace  with 
his  laborers  and  by  various  expedients  try  to  induce 
them  to  work.  The  scarcity  of  voluntary  labor  made 
the  temptation  to  force  the  Indian  to  work  greater  and, 
where  the  employer  could  get  the  effective  aid  of  the 
authorities,  abuses  of  this  sort  were  not  infrequent. 
Some  of  the  worst  wrongs  of  the  peonage  system  oc- 
curred in  the  southern  states.3 

A  very  large  share  of  the  population  in  the  southern 
states  worked  for  no  master  and  but  little  for  them- 
selves. They  were  satisfied  with  their  native  villages 
in  which  there  were  few  social  necessities.  They  lived  in 
palm  leaf  houses,  they  needed  almost  no  clothing.  What 
little  they  used  the  women  wove  from  local  cotton  in 
the  hot  lands.  Those  from  the  colder  plateau  districts 

3  See  Wallace  Thompson,  The  People  of  Mexico,  New  York,  1921, 
p.  325  et  seq. 


122    MEXICO  AND  ITS  RECONSTRUCTION 

obtained  cotton  by  trading  fruit  or  other  natural  pro- 
ducts for  it.  A  few  had  flocks  of  sheep. 

The  diet  of  these  people  was  chiefly  corn,  beans, 
fruits,  and  game.  They  bought  salt  and  occasionally 
beef.  The  chief  indulgence  was  alcohol.  They  were 
all  but  self-sufficient,  they  were  almost  untouched  by 
taxes,  unaffected  by  commerce  and  industry.  Among 
such  a  population  labor  was  scarce  though  potential 
laborers  many. 

In  some  of  the  southern  states  work  by  the  task,  the 
so-called  faena,  or  tarea,  was  frequent  in  the  middle 
'80s  and  in  some  municipalities  it  was  the  only  way  of 
hiring  labor.  In  Cuaatla,  Morelos,  in  one  of  the  sugar 
districts  there  were  day  and  task  laborers.  The  latter 
did  a  set  amount  for  25  centavos.  An  active  man  could 
do  three  tasks  but  most  stopped  after  doing  one  or 
one  and  a  half,  although  the  day  laborers  might  still 
be  at  work.  Those  who  worked  by  the  day  were  of 
two  classes.  Both  worked  all  day.  Those  of  both 
classes  were  required  to  do  a  certain  amount  of  work 
before  sunrise.  In  the  afternoon  those  who  did  not 
live  on  the  estate  had  to  do  another  equal  task  com- 
pleted by  eight  o'clock  on  regular  week  days  without 
increase  in  pay.  On  the  other  hand,  they  could  come 
to  work  at  noon  on  Monday  and  stop  Saturday  after- 
noon at  two  or  three.  All  the  men  were  paid  twice 
a  week,  on  Tuesday  what  they  had  earned  to  that  time, 
called  the  socorro,  and  on  Saturday  the  ray  a. 

Farther  north  in  the  State  of  Puebla  some  laborers 
worked  by  the  day  or  week  for  3114  centavos  a  day  dur- 
ing the  unusual  stress  of  hay  or  wheat  harvest.  Those 


THE  LABOR  CONTRACT  123 

who  worked  by  the  year,  the  contract  regularly  begin- 
ning with  Holy  Week,  were  paid  at  the  rate  of  25  cen- 
tavos  a  day.  At  the  beginning  of  the  contract  the  em- 
ployer took  over  the  laborer's  previous  debts,  gave  him 
clothing  for  the  season — an  act  repeated  on  the  first  day 
of  November — and  a  certain  amount  in  cash.  He  was 
obligated  to  give  the  laborer  50  centavos  a  week  for 
spending  money  and  one  cuartilla,  about  1.38  liters,  of 
corn  for  subsistence.  The  employer  paid  the  unusual 
expenses  of  the  peasant  for  such  items  as  medicines, 
wedding  and  saint's  day  celebrations,  and  the  like.  The 
peon  received  the  use  of  a  quartern  of  land,  seed,  and 
the  tools  needed  to  work  the  land.  Fuel  for  his  domes- 
tic use  was  also  furnished. 

The  lot  of  the  debt  laborer  in  the  north  appears  to 
have  been  less  favorable  than  in  the  south.  In  Coahuila 
the  harsh  legislation  formerly  in  force  was  nominally 
softened  by  the  provisions  of  the  constitution  of  1857 
and  by  a  new  servant  law  of  January  28,  1868,  which 
forbade,  advancing  to  a  servant  in  a  year  more  than  he 
could  pay  back  in  six  months.  This  was  intended  to 
protect  the  peon  against  his  own  improvidence.  The 
rule  was  not  obeyed.  The  masters  continued  to  advance 
large  sums  to  hold  the  men  as  before.  On  the  20th  of 
February,  1881,  another  servants'  law  was  passed.  The 
master  could  not  dismiss  the  servant  without  eight  days' 
notice  nor  could  the  servant  leave  without  paying  his 
debts.  An  increasing  number  of  disputes  involved  this 
latter  provision.  For  the  servants  it  was  claimed  that 
it  was  contrary  to  article  five  of  the  Constitution  of  the 
republic,  but  in  practice  the  authorities  required  a  run- 


away  servant  to  return  to  the  employ  of  his  creditor  on 
the  ground  that  to  abandon  employment  violated  articles 
of  the  penal  code  and  the  law  of  servants.*  If  a  trial  re- 
sulted, the  servant  appealed  to  the  Constitution  for  pro- 
tection. Efforts  were  then  regularly  made  to  settle  the 
case  by  compromise.  Masters  feared  that  if  the  Consti- 
tution was  held  to  apply  all  servants  might  repudiate 
their  debts.  Servants  were  indisposed  to  run  the  chance 
of  having  the  criminal  sentence  declared  against  them. 

There  were  many  variant  contracts  in  the  north  as 
well  as  in  the  south.  For  example,  in  the  district  of 
Comonfort,  municipality  of  Chamacuero  in  Coahuila, 
three  sorts  of  share  farmers  were  found.  Renters  might 
receive  from  the  hacienda  owner  the  use  of  the  land,  the 
seed,  a  yoke  of  oxen,  and  a  load  of  grain  to  be  paid 
back  at  harvest  time.  The  renter  paid  one-fifth  of  the 
expenses  in  harvesting  and  received  from  the  harvest 
one-fifth  less  than  his  half.  By  another  plan  the  yield 
was  shared  equally,  the  owner  furnishing  the  land,  the 
seed,  an  ox,  and  half  of  all  expenses  including  those  of 
the  harvest.  If  the  laborer  received  land,  seed,  a  yoke 
of  oxen,  one  peso  50  centavos  in  cash,  and  a  load  of 
corn,  these  last  not  to  be  paid  back,  and  did  all  the  work, 
he  received  one-fourth  of  the  crop.6 

During  the  progress  of  the  Diaz  regime  there  were, 

*  Penal  Code,  Art.  407;  Law  of  Servants,  Article  10. 

6  The  description  of  the  labor  contract  in  Coahuila  is  well  de- 
tailed in  Informes  y  documentos  relativos  a  comercio  interior  y  ex- 
terior, agrlcultura  e  Industrias,  Number  10,  April,  1886,  Mexico, 
p.  92  et  seq.  From  this  series  the  other  illustrations  given  above 
are  taken.  A  very  excellent  discussion  of  wage  conditions  in  Mexico 
in  1891  is  given  in  Matias  Romero,  op.  clt.,  pp.  125-45. 


JHE  LABOR  CONTRACT  125 

of  course,  marked  changes  in  labor  conditions.  No  great 
economic  transformation  such  as  that  which  marked  the 
period  could  occur  without  disturbing  the  entire  net- 
work of  human  relations  upon  which  the  national  life 
rested.  Nevertheless,  the  change  in  the  labor  contract 
was  less  fundamental  than  apparent.  Cities  grew,  com- 
merce increased,  and  the  nascent  industry  of  the  '80s 
achieved  an  importance  in  the  public  economy  never  be- 
fore known.  On  the  routes  most  visited  by  foreigners 
there  were  many  evidences  of  the  passing  of  the  old  and 
the  coming  of  a  new  economic  day.  But  in  the  back 
country  life  was  still  stirred  from  the  accustomed  rou- 
tine only  in  a  secondary  way.  Local  customs  continued, 
legislation  intended  to  bring  the  nation  into  line  with 
;the  developments  in  the  Western  World  was  added  as 
an  embroidery  or  flourish,  but  it  did  not  replace  the 
habits  of  generations.  It  was  not  fundamental  in  char- 
acter. The  position  of  the  average  Mexican  laborer  was 
still  one  of  status  not  of  contract. 

The  labor  arrangements  found  in  later  periods  in  dif- 
ferent parts  of  the  country  indicate  the  degree  to  which 
the  relations  of  employer  and  employee  remained  un- 
affected by  the  developments  which  were  transforming 
the  life  of  the  nation.  They  show  also  modifications 
which  the  new  conditions  introduced  in  the  labor  con- 
tract. 

In  Yucatan,  at  the  end  of  the  Diaz  regime,  debt  serv- 
ice was  still  a  characteristic  of  the  labor  system.  It  was 
still  illegal  but  seldom  questioned.  The  large  hacenda- 
dos,  or  owners  of  haciendas,  aimed  to  keep  as  many 
laborers  living  on  their  plantations  as  they  could.  Many 


126    MEXICO  AND  ITS  RECONSTRUCTION 

of  the  servants  on  the  better  managed  places  had  been 
born  there  as  had  their  fathers.  They  were  paid,  in 
some  cases,  at  a  fixed  rate  under  period  contracts;  in 
others,  a  daily  wage  according  to  the  number  of  hene- 
quen  leaves  cut  and  piled — the  raising  of  henequen  be- 
ing practically  the  single  local  industry.  The  laborers 
received  houses,  garden  plots,  and  medical  attendance 
free.  The  masters,  in  some  cases,  supplied  rations  of 
corn  free;  in  others  it  was  sold  to  the  laborers  at  less 
than  the  market  price.  It  appears  that  there  was  little 
dissatisfaction  with  the  system  in  this  state  on  the  part 
of  either  the  men  or  their  employers.  The  state  was 
but  little  stirred  by  the  revolution  when  it  came,  in  fact 
it  took  no  part  in  the  effort  to  overthrow  the  old  regime. 
It  was  not  until  after  1914  that  the  revolution  affected 
the  laboring  population.  Even  then  they  were  roused 
against  their  employers  only  by  insistent  propaganda 
backed  by  those  in  control  at  the  capital. 

Chiapas,  in  the  latter  part  of  the  Diaz  regime,  was 
still  without  a  sufficient  labor  supply  for  its  develop- 
ment. An  American  manager  for  one  of  the  large  plan- 
tations declares  that  his  company  and  all  those  sur- 
rounding were  so  anxious  to  have  labor  available  that 
they  were  willing  to  give  a  plot  of  land  to  any  Indian 
family  that  would  work  it.  Any  land  hunger  on  the 
part  of  the  native  could  thus  easily  be  satisfied.  About 
150  families  were  settled  on  the  estate  in  this  way.  Gen- 
erally the  Indian  in  that  region  did  not  want  a  definite 
piece  of  land,  he  wished  only  to  burn  over  a  field  and 
get  one  or  two  crops  from  it  by  planting  directly  in  the 
unplowed  soil.  When  grass  and  brush  began  to  ap- 


THE  LABOR  CONTRACT  127 

pear,  he  abandoned  the  field  for  another,  which  he  could 
prepare  by  burning  it  over,  a  process  easier  than  plow- 
ing. 

Whether  given  land  on  a  plantation  or  living  in  his 
own  village,  the  Indian  was  loath  to  work.  Reliance 
still  had  to  be  on  a  system  of  induced  labor.  In  this 
region  the  majority  of  the  Indians  had  to  be  secured 
from  communities  in  which  the  men  had  their  own  corn 
patches,  wheat  fields,  pigs,  chickens,  and  perhaps  even 
their  own  cotton  and  sugar.  The  plantation  owner  had 
no  legal  authority  to  force  these  men  to  work  for  him, 
but  by  long-established  custom  every  able-bodied  man 
could  be  called  on  to  work  one  week  in  four.  Laborers 
had  to  be  summoned  to  work  and  in  this  the  civil  au- 
thority gave  its  support  to  the  requests  of  the  planta- 
tion owners. 

In  actual  practice  in  this  region  the  plantation  owner 
hired  a  man  who  could  speak  Spanish  and,  preferably, 
the  native  dialects  to  do  recruiting.  A  man  represent- 
ing the  civil  authority  would  accompany  this  person  on 
his  rounds  or  the  jefe  politico  might  give  him  a  letter 
to  the  head  men  of  the  native  villages  from  which  the 
labor  was  to  be  drawn.  These  head  men  and  the  jefe 
politico  knew  how  many  men  there  were  in  each  village, 
how  many  had  been  requisitioned,  and  whether  there 
was  a  balance.  Notice  was  served  on  the  head  man  and 
he  would  see  that  the  Indians  promised  reported.  If  he 
were  reluctant,  he  was  sometimes  given  a  tip.  Those 
from  each  village  arrived  together,  worked  together  on 
the  plantation,  and  left  together.  Once  on  the  planta- 
tion they  would  usually  stay  from  four  to  ten  weeks  un- 


128    MEXICO  AND  ITS  RECONSTRUCTION 

der  special  inducements,  but  they  were  free  to  go  after 
one  week.  Payment  was  made  directly  to  the  man  at  the 
end  of  each  week — by  the  piece  system  or  at  one  dollar 
Mexican  per  week,  if  employed  on  that  basis. 

The  day's  work  bore  a  strong  contrast  to  that  in  in- 
dustrial communities.  The  men  were  rousted  out  be- 
tween six  and  seven  in  the  morning,  they  came  to  a  cen- 
tral house  where  they  received  a  drink  of  sugar  cane 
rum  "forty  drinks  to  the  liter  and  so  strong  you  could 
burn  it  in  a  lamp."  Each  man  got  all  the  beans  he  could 
eat,  half  of  a  large  corn  cake,  and  a  ball  of  boiled  hom- 
iny, which  latter  he  took  to  the  fields  with  him  for  his 
three  lunches  at  nine,  twelve,  and  four  o'clock.  At  noon 
there  was  a  two-hour  rest.  Work  was,  as  a  rule,  by  the 
tarea  system.  There  were  frequent  interruptions. 
Though  they  were  paid  by  the  piece,  the  men  had  to  be 
followed  up  constantly  or  they  would  loaf  and  play.  On 
the  average  the  work  day  was  about  nine  hours.  Re- 
turning at  night  each  man  received  another  drink  of 
rum,  all  the  beans  he  could  eat,  and  the  other  half  of  his 
corn  cake. 

Along  with  these  Indian  laborers  there  were  often 
employed  in  Chiapas  another  group,  generally  with 
some  mixture  of  Spanish  blood,  who  worked  under  con- 
tracts more  nearly  approaching  the  peonage  system  as 
usually  reported.  The  man  who  wished  to  become  a 
peon  came  to  the  employer  and  asked  for  a  loan  under 
the  usual  employment  contract.  This  was  given.  Then, 
if  the  relation  was  newly  established  and  the  man  was 
without  family,  he  disappeared  for  an  agreed  period. 
This  time  passed  and  the  money  gone  he  reappeared, 


THE  LABOR  CONTRACT  129 

settled  down  on  the  ranch,  and  became  a  fixture.  Soon 
he  had  a  wife,  a  garden  plot,  some  chickens,  and  a  pig 
or  two.  He  worked  during  the  week  and  on  Saturday 
night  appeared  for  his  wage  balance,  if  any,  which  he 
proceeded  to  spend  on  the  simple  but  powerful  luxuries 
to  which  his  generation  was  accustomed.  Generally  he 
did  not  try  to  pay  his  debts  but  to  increase  them.  To 
have  a  heavy  debt  was  for  many  a  sign  of  standing  in  the 
community,  an  evidence  that  the  employer  had  confi- 
dence in  the  employee. 

In  the  latter  part  of  the  Diaz  regime,  in  some  of  the 
sugar  and  coffee  plantations  of  Vera  Cruz  the  day  labor, 
task  and  share-rent  systems  were  apparently  gradually 
displacing  the  classic  form  of  peonage.  A  French 
plantation  operator  employing  between  700  and  1,000 
workmen  in  the  low  lands  worked  his  fields  by  means  of 
men  recruited  chiefly  from  the  higher  altitudes.  Many 
of  his  neighbors  had  adopted  the  share-rent  system  of 
employment.  He  himself  preferred  to  get  his  labor 
through  capitanes  to  whom  he  paid  five  per  cent  of  the 
wages  of  the  day  laborers  as  premium.  Of  these  la- 
borers about  one-fourth  were  induced  to  live  on  the 
estate,  the  rest  were  casuals  paid  50  cents  Mexican  per 
tarea  or  from  56  to  72  cents  Mexican,  if  on  a  day  labor 
basis.  In  this  district,  as  elsewhere,  the  lack  of  ambi- 
tion was  alleged  to  be  a  prominent  characteristic  of  the 
laborer.  He  would  not  do  more  than  one  tarea  though 
he  could  easily  do  two.  Those  who  lived  on  the  estate, 
though  they  were  given  garden  plots,  seldom  cultivated 
them  efficiently  and  the  share  renters,  when  the  return 
for  the  season's  harvest  was  paid  them,  almost  without 


130    MEXICO  AND  ITS  RECONSTRUCTION 

exception  squandered  their  earnings  in  the  most  im- 
provident manner. 

An  engineer  formerly  employed  by  the  Mexican  gov- 
ernment reports  that  labor  conditions  in  Tamaulipas 
were  practically  the  same  in  1910  as  they  were  a  gen- 
eration before.  The  money  wage  had  risen  to  from  six 
to  nine  pesos  a  month  but  the  historic  system  controlled 
the  labor  contract.  The  laborer  could  not  leave  until 
he  paid  his  debt.  Once  in  debt,  he  could  only  with  great 
difficulty  get  out  and,  if  not  in  debt,  he  could  only  with 
great  difficulty  remain  so.  Peons  were  given  a  credit 
account  which,  on  account  of  advances  usually  made  at 
the  beginning  of  the  contract,  always  showed  a  debit  bal- 
ance. They  sometimes  received  the  right  to  live  in  a 
house  owned  by  the  employer,  sometimes  they  built  their 
own  bush  shacks.  If  they  were  ambitious,  they  could 
regularly  have  land  for  a  garden,  but  they  seldom  did  so. 

These  illustrations  for  both  the  earlier  and  the  later 
period  of  the  Diaz  regime  are  samples  of  widely  varying 
practices  in  which  there  was  an  underlying  similarity  in 
that  the  contracts  were  not  free  will  engagements.  In 
this  sense  they  are  typical  of  the  conditions  under  which 
a  large  part  of  the  laboring  population  worked.  They 
are  not  typical  in  other  respects,  because  the  labor  con- 
tract in  different  parts  of  the  country  and  even  within 
the  same  region  was  of  such  varied  character  that  there 
was  no  type. 

Though  peonage  was  found  in  widely  separated  parts 
of  Mexico,  both  at  the  beginning  and  at  the  end  of  the 
Diaz  regime,  it  is  a  mistake  to  consider  it  to  have  in- 
volved all  the  population  at  either  period.  A  consider- 


THE  LABOR  CONTRACT  131 

able  number  of  the  natives  were  never  touched  by  it 
and,  especially  with  the  development  of  the  economic 
resources  of  the  country,  there  came  into  existence,  in 
the  larger  cities,  along  the  railroads,  in  the  mines,  textile 
working  communities,  oil  fields,  and  elsewhere  a  class 
dependent  upon  the  wage  system  such  as  it  is  known  in  '-'.'•' 
other  countries.  These  workmen  lived,  as  a  rule,  under 
conditions  less  favorable  than  those  found  in  the  United 
States.  They  were  better  off,  however,  in  both  living 
conditions  and  wages,  than  the  average  Mexican  la- 
borer. They  seemed  to  be  the  beginning  of  a  labor  class 
similar  to  those  found  in  more  advanced  communities. 

The  pictures  that  have  generally  been  drawn  in  the 
United  States  of  labor  conditions  in  Mexico  at  the  end 
of  the  Diaz  regime  are  unfair.  A  great  deal  of  sym- 
pathy has  been  wasted  on  that  portion  of  the  Yaqui 
tribes  that  was  transferred  from  the  northwest  to  Yuca- 
tan and  Campeche,  though  there  were  undoubted  abuses 
committed  in  the  process.  There  were,  in  certain  re- 
gions in  the  southern  states,  labor  conditions  altogether 
indefensible  but  they  were  not  general.  The  "shanghai- 
ing" of  men  from  the  cities,  especially  the  capital,  for 
work  on  plantations  on  the  isthmus  of  Tehuantepec 
seems  to  have  occurred  in  a  large  number  of  cases  but 
such  practices  were  not  a  real  part  of  the  peonage  sys- 
tem.8 The  worst  abuses  of  this  sort,  roundly  denounced 
by  all  responsible  Mexicans,  appear  to  have  occurred  in 
the  Valle  Nacional  of  Oaxaca.  Such  conditions  involv- 
ing the  herding  of  the  victims  into  barbed  wire  en- 

8  See  Wallace  Thompson,  op.  cit.,  p.  326,  el  seq. 


132    MEXICO  AND  ITS  RECONSTRUCTION 

closures  and  various  methods  of  inhuman  treatment 
were  exceptional,  probably  not  more  typical  of  Mexican 
conditions  than  the  story  of  Simon  Legree  was  typical 
of  conditions  in  the  southern  United  States  in  slavery 
days. 

That  the  labor  system  in  force  in  Mexico  was  a  drag 
upon  the  development  of  the  country  was  frankly  recog- 
nized by  forward  looking  Mexicans.  None  have  been 
its  more  acrid  critics.  Many  are  the  telling  contrasts 
which  they  have  painted  of  the  conditions  to  be  found 
north  and  south  of  the  Rio  Grande.  Representative 
of  these  criticisms  are  the  following:  "On  the  border 
there  is  decent  labor,  supported  by  justice,  with  the 
rights  of  man  vibrating  in  every  nerve  and  in  every  drop 
of  blood;  the  agriculturist  with  his  hide  boots  and  his 
wage  of  two  dollars  gold ;  the  laborer  who  works  in  the 
fields  by  the  day,  who  upon  his  return  home  at  night, 
clean  and  happy,  takes  to  his  arms  a  flock  of  strong 
children."  South  of  the  river  "is  savagery,  dark  and 
brooding,  a  silent  barbarity  .  .  .  which  asks  nothing  of 
light,  a  surrendered  right  which  asks  nothing  of  happi- 
ness, a  weakened  constitution  which  asks  nothing  more 
than  a  drink  of  alcohol  .  .  .  and  five  ounces  of  caustic 
stuff  in  the  stomach;  a  paternity  without  sovereignty, 
a  home  without  rights,  an  unhappy  wife;  a  nominal 
country,  slavery — at  the  price  of  100  to  200  pesos.  .  .  ." 
"The  peon  is  a  drunkard  because  of  hunger ;  by  custom, 
by  exploitation,  ignorance,  dissimulation  of  the  author- 
ities, and  because  of  his  tendency  to  laziness.  .  .  .  The 
family  of  the  day  laborer  .  .  .  does  not  exist  .  .  .  the 
children  if  ...  they  escape  tuberculosis,  hardly  reach 


THE  LABOR  CONTRACT  133 

the  age  of  maturity  before  they  .  .  .  inaugurate  .  .  . 
.  .  .  the  .  .  .  life  .  .  .  that  they  learned  from  their  par- 
ents." "The  world  has  never  known  a  school  before  a 
home  .  .  .  and  if  we  are  to  believe  our  eyes,  that  among 
the  jornaleros,  or  day  laborers,  the  family  does  not  ex- 
ist, the  first  thing  that  we  must  do  is  to  create  it."  Un- 
der the  unfree  labor  system  economic  independence  is 
impossible.  "As  long  as  the  jornalero  cannot  eat  meat, 
as  long  as  he  cannot  support  his  children  through  school 
age,  as  long  as  he  is  a  legal  slave  ...  he  will  not  be  a 
civilized  man  ..." 

There  have  been  apologists  for  peonage  both  in  and 
out  of  Mexico.  By  them  the  system  is  pictured  as  not 
only  an  essential  for  the  economic  development  of  the 
country  but  as  a  kind  paternalism  which  is  a  positive 
benefit  to  the  native.  Through  it  he  is  taught  the  habits 
of  industry,  he  is  introduced  to  the  wants  that  will  make 
for  his  own  betterment,  he  is  given  advances  when  his 
necessities  are  greater  than  his  slender  means,  he  re- 
ceives assistance  when  crops  fail  and  medical  attendance 
when  his  family  falls  ill.  Instances  are  cited  in  which 
the  laboring  classes  have  protested  against  a  change  to 
a  daily  wage  system  that  would  break  the  relationship 
of  protector  and  protected  and  throw  the  latter  out  upon 
the  mercies  of  the  world. 

It  is  unnecessary  to  prove  that  there  are  cases  in 
which  the  employer  has  made  his  relation  to  his  Mexican 
employees  a  means  for  improving  their  lot.  But  though 

7  Quotations  from  speeches  in  the  agricultural  congress  of  the 
diocese  of  Tulancingo  reported  in  Boletin  de  la  secretaries  de  / 'omen- 
to.  Numero  especial  de  propaganda,  Julio,  1906,  Mexico,  1906. 


134    MEXICO  AND  ITS  RECONSTRUCTION 

the  induced  labor  system  as  an  economic  instrument  has 
many  defenders  among  employers  of  both  Mexican  and 
non-Mexican  nationality,  there  can  be  no  doubt  that  it 
lent  itself  to  serious  abuse,  and  that  it  encouraged  the 
defects  with  which  the  laborer  was  charged.  The 
wrongs  committed  are  not  confined  to  any  single  region. 
The  better  class  hacendados,  as  a  whole,  themselves  de- 
plored the  labor  conditions,  which  they  apparently  took 
no  determined  steps  to  remedy. 

The  arguments  of  the  defenders  of  peonage  do  not 
convince  any  large  percentage  of  those  who  have  ob- 
served the  practices  it  developed.  They  are  the  same 
as  those  used  in  the  United  States  before  the  Civil  War 
to  defend  negro  slavery.  No  social  institution  is  en- 
titled to  be  judged  by  what  it  might  be  if  human  nature 
were  other  than  we  find  it  or  by  the  beneficent  results 
obtained  under  it  in  isolated  cases.  Peonage  is  a  sur- 
vival in  Mexico  and  an  unwholesome  one.  Even  if,  as 
its  defenders  insist,  its  abolition  will  bring  a  slower  rate 
of  economic  development  than  would  otherwise  be  pos- 
sible, there  are  nevertheless  few  in  the  more  enlightened 
countries  of  the  world  who  will  hesitate  to  declare  in 
favor  of  its  abolition.  No  nation  can  afford  to  sacrifice 
the  individual  liberties  of  its  people  to  secure  greater 
economic  advantage.  Unfree  service  is  a  contradiction 
in  the  twentieth  century  and  no  effort  to  bring  it  to  an 
end  can  fail  to  have  the  sympathy  of  those  who  hope  to 
see  the  growth  of  true  self-government  among  the  na- 
tions of  the  world. 


CHAPTER  XI 

THE  MEXICAN  LABORER:    HIS  WAGES  AND  DEMANDS 

IN  spite  of  the  fact  that  nominal  wages,  as  is  indicated 
above,  have  so  little  relation  to  the  real  return  to  the 
Mexican  laborer,  a  sketch  is  given  here  of  the  payments 
made  at  various  periods  in  different  parts  of  the  repub- 
lic.1 In  some  cases  it  is  doubted  whether  the  real  wage 
in  later  years  was  any  better  than  in  the  earlier  part 
of  the  Diaz  regime.  Taken  as  a  whole,  however,  it  ap- 
pears beyond  question  that  the  laborer  was  better  paid 
at  the  end  of  the  period  than  at  its  beginning.  Only 
scattered  statements  can  be  obtained  indicating  the  nom- 
inal wage  rates  in  any  pursuits  at  any  time  in  Mexico. 
Humboldt  reported  in  1804  that  the  agricultural  laborer 
received  about  28  cents  per  day.  In  1884,  at  the  be- 
ginning of  the  railroad  era,  Adolph  F.  Bandelier  re- 
ported that  the  Mexican  received  daily  "as  farm  la- 
borer 25  to  Sl1/^  cents;  as  railroad  hand  50  cents."  Da- 
vid A.  Wells  reported  in  1887  that  the  wages  of  ordi- 
nary farm  hands  were  from  18  to  25  cents  per  day,  the 
better  class  of  adults  receiving  37  cents  per  day.  The 
survey  undertaken  by  the  Mexican  government,  the 
results  of  which  were  published  in  1885-7,  showed  a 
wider  range — wages  for  men  being  in  some  cases  as  low 
as  12  cents  and  in  others  as  high  as  $1.50  Mexican.  In 

1  See  Wallace  Thompson,  The  People  of  Mexico,  New  York, 
1921,  pp.  348-370. 

135 


136    MEXICO  AND  ITS  RECONSTRUCTION 

1893  the  Two  Republics,  an  English  paper  published 
in  Mexico,  stated:  "It  is  officially  announced  that  the 
average  daily  wage  in  this  country  is  27  cents."  The 
paper  declared  that  this  was  "probably  at  least  10  cents 
more  than  it  was  20  years  ago."  In  1896  Matias  Ro- 
mero, one  of  the  best  Mexican  authorities,  stated  that 
the  average  wage  of  day  laborers  was  about  37%  cents. 

Industrial  wages  have  risen  with  the  growth  of  Mex- 
ican industry.  Official  statistics  showing  the  usual  pay- 
ments at  various  periods  are  not  available.  A  study 
made  just  before  the  conditions  of  the  old  regime  were 
upset  reported  about  117,992  persons  as  engaged  in  in- 
dustry, of  whom  100,717  were  men  and  17,275  women.2 
The  political  divisions  from  which  the  greatest  number 
of  industrial  workers  were  reported  were,  in  order,  Vera 
Cruz,  the  Federal  District,  Nuevo  Leon,  Jalisco, 
Puebla,  Oaxaca,  Mexico,  and  Michoacan.  The  least  in- 
dustrial regions  were  Tamaulipas,  Lower  California, 
Colima,  Campeche,  Chiapas,  and  Yucatan.  Industrial 
wages  were  highest  in  the  states  which  had  the  greater 
industrial  development.  The  higher  wages  for  men  and 
for  women  were  found  in  the  states  bordering  the 
United  States  and  in  those  in  which  the  stimulus  of 
foreign  enterprise  had  most  deeply  affected  the  local 
life.  This  contrast  is  true,  indeed,  in  agricultural  as 


2  Of  course,  since  there  are  no  official  statistics  available  for  the 
making  of  which  "industry"  is  closely  defined,  such  statements  as 
the  above  can  only  approximate  the  truth.  There  is  no  way  of  tell- 
ing, for  example,  whether  any  attempt  was  made  to  include  small 
household  industries,  though  it  appears  they  cannot  have  been 
covered. 


WAGES  AND  DEMANDS  OF  LABOR  137 

well  as  industrial  wages.  There  was  a  wide  difference 
between  the  highest  and  lowest  wages  in  the  same  states. 
In  many  cases  the  better  paid  received  five  and  even 
eight  times  as  much  as  the  poorest.  Women  were  paid 
much  less  than  men — as  a  rule  rather  less  than  the  class 
of  men  workers  who  were  most  poorly  paid.3 

The  highest  wage  reported  as  paid  to  any  Mexican 
laborers  in  industrial  work  was  $3.00,  the  lowest  12 
cents.  The  highest  wage  for  women  was  $1.50,  the 
lowest  six  cents.  No  attempt  is  made  to  state  an  aver- 
age— in  fact  the  conditions  surrounding  Mexican  labor 
are  such  that  no  estimate  has  great  value.  The  lowest 
figures  announced  above,  for  example,  may  be  for  chil- 
dren and  represent  but  few  individuals.  The  highest 
were  paid,  it  appears,  in  comparatively  few  cases. 

The  practice  in  individual  industrial  establishments 
or  groups  of  establishments  gives  the  best  illustration  of 
the  upward  trend  of  wages.  In  1906,  wages  for  adults 
in  El  Oro  mine  varied  from  371/2  to  50  cents  a  day.  It 
seems  to  be  the  general  consensus  of  opinion  that  prior 
to  the  revolution  the  average  daily  wage  for  farm  la- 
borers was  about  50  cents.  Unskilled  laborers  on  the 
railroads  received  from  62%  cents  to  $1.75  a  day. 

Laborers  in  the  oil  regions  about  Tampico  received 
75  cents  a  day  in  1908-9  and  $2.00  and  even  $3.00  in 
1914.  The  average  wage  of  several  thousand  laborers 
in  this  district  was  announced  as  $2.10.  In  the  mining 
districts  wages  ranged  as  high  as  $1.70  to  $2.50  per  day, 

3  These  comparisons  are  based  on  tables  in  Eric  Gunther,  Hand- 
buch  von  Mexico,  Leipzig,  1912,  p.  179  et  seq.  The  wage  figures 
are  in  Mexican  currency. 


138    MEXICO  AND  ITS  RECONSTRUCTION 

the  average  for  the  whole  industry  being  not  less  than 
$1.00.4 

The  payrolls  of  one  of  the  largest  American  construc- 
tion companies  operating  in  Mexico  show  that  the  pre- 
vailing wages  of  their  peon  laborers  in  1909  and  1910 
was  $1.25.  In  1911,  the  average  was  almost  $1.50.  In 
1912-13,  the  average  fell  gradually,  reaching  $1.25  in 
the  latter  year.  These  figures  are  in  Mexican  currency, 
equal  to  about  half  the  same  amounts  in  United  States 
gold.  . 

The  tendency  of  wages,  both  the  nominal  money  pay- 
ments and  the  actual  return,  during  the  Diaz  regime, 
so  far  as  indicated  by  the  information  available,  seems 
to  have  been  steadily  upward.  As  a  rule,  the  rates  of 
payment  were  lower  in  the  more  thickly  settled  uplands. 
The  highest  average  payments,  these  individual  cases, 
like  the  general  survey  previously  cited,  seem  to  show, 
were  found  in  the  unhealthy  lowlands  and  in  the  north- 
ern states  where  proximity  to  the  United  States  and 
the  prevalence  of  undertakings  by  foreign  capital  ap- 
pear to  have  had  a  favorable  effect.  As  a  rule,  the 
wages  of  laborers  working  for  foreign  corporations  in 
the  northern  states  were  higher  than  those  paid  else- 
where. The  mining  and  oil  companies  showed  the  high- 
est average.  The  textile  mills  paid  less  but  still  at  a 
rate  appreciably  above  that  for  agricultural  labor. 

The  wage  conditions  created  by  the  revolution  were 
so  abnormal  that  a  study  of  them  does  not  allow  any 

*  The  figures  in  this  paragraph  are  quoted  and  summarized  from 
a  discussion  by  W.  B.  Parker,  of  S.  Pearson  and  Son,  280  Broad- 
Way,  New  York. 


WAGES  AND  DEMANDS  OF  LABOR    139 

general  estimate  as  to  whether  they  were  higher  or  lower 
than  those  paid  before.  Striking  contradictions  present 
themselves  on  every  side.  Wages — nominal  wages— 
in  some  parts  of  the  country  remained  stationary  for 
months  in  the  face  of  a  rapidly  depreciating  currency. 
In  such  cases,  of  course,  the  laborer,  since  the  nominal 
cost  of  living  went  steadily  up,  received  less  and  less. 
As  one  employer  in  the  Puebla  district  has  declared: 
"the  men  kept  on  working  for  months  when  a  week's 
wages  would  not  have  bought  them  a  bowl  of  beans." 
When  the  readjustment  to  the  depreciated  currency 
came,  there  had  occurred  also  such  an  unsettling  of 
prices  that  nothing  can  be  stated  as  to  the  actual  effect 
on  the  economic  status  of  the  laboring  classes. 

In  this  and  other  regions,  when  the  local  peasantry 
refused  to  continue  work  on  the  plantations  at  the  old 
rates,  the  employers  who  were  able  to  keep  control  of 
their  property  and  keep  it  going  had  to  raise  the  wages 
several  hundred  fold,  in  many  cases  so  much  as  to  con- 
stitute a  real  as  well  as  a  nominal  increase. 

In  still  other  areas  the  laboring  classes,  or  those  who 
claimed  to  represent  them,  having  secured  control  of 
the  government,  were  able  to  profit  by  the  peculiar  cir- 
cumstances of  the  local  industry  and  to  demand  extor- 
tionate prices  for  whatever  labor  they  performed.  The 
best  example  of  this  condition  was  found  in  Yucatan. 
The  spectacular  rise  in  the  price  of  sisal,  due  to  the  con- 
ditions created  by  the  World  War,  and  the  exploita- 
tion of  the  hacendados  by  the  revolutionary  government 
put  the  agricultural  laborers  in  a  position  to  demand 
wages  comparable  to  those  paid  before  the  war  in  highly 


140    MEXICO  AND  ITS  RECONSTRUCTION 

developed  industries  in  Europe  and  the  United  States. 
Prices  were  also  extortionate.  Ice  cream  sold  at  the 
equivalent  of  45  cents  United  States  currency  a  plate, 
chewing  gum  at  five  cents  a  stick,  pears  at  40  cents 
apiece,  and  small  tin  cans  of  fruit  at  $1.50  apiece.  Yet, 
for  the  time  being,  the  most  feverish  prosperity  was 
evident  everywhere.  The  Chinese  laundrymen  used 
automobiles  to  deliver  their  customers'  shirts,  mestiza 
market  women  drove  up  and  down  the  fashionable  prom- 
enades of  Merida,  the  state  capital,  in  coaches,  and  the 
local  hotels  charged  prices  far  above  those  of  similar 
character  in  New  York  or  Paris.  For  the  former  peon, 
however,  though  the  prices  of  what  he  consumed  had 
also  risen,  the  revolution,  because  of  his  increased  wages, 
was  at  least  a  temporary  advantage. 

The  old  regime  once  upset  is  never  reestablished  but 
it  seems  clear  that  coming  back  to  work  in  time  of  peace, 
in  many  parts  of  Mexico,  will  necessitate  painful  sacri- 
fice on  the  part  of  the  laborer  of  many  of  the  exceptional 
conditions  he  enjoyed  during  the  upheaval  of  the  revo- 
lution. It  is  equally  clear,  however,  that  the  low  wage 
level  of  pre-revolutionary  days  has  gone  forever. 

The  labor  union  movement  in  Mexico  was  only  be- 
ginning in  the  years  before  the  revolution.  The  gov- 
ernment was  indifferent  to  the  rights  of  labor  and  dis- 
couraged rather  than  favored  the  efforts  of  the  work- 
men to  improve  their  conditions.  The  first  important 
development  occurred  among  railway  laborers,  whose 
union  dates  from  1904.  There  developed  also,  in  con- 
nection with  the  nationalization  of  the  railroads,  a  move- 
ment for  the  nationalization  of  the  railway  service.  A 


WAGES  AND  DEMANDS  OF  LABOR    141 

policy  was  introduced,  by  which  no  more  Americans 
were  taken  on  in  the  railway  service,  though  those  al- 
ready employed  were  allowed  to  stay.  At  first  the  new 
rule  was  applied  to  the  lower  ranks.  The  change  to 
Mexican  service  came  more  rapidly  than  the  rule  de- 
manded, since  many  of  the  Americans  would  not  stay 
under  the  conditions  that  soon  surrounded  their  work. 
As  a  result,  by  the  end  of  the  old  regime,  Americans 
occupied,  with  a  few  exceptions,  only  the  higher  execu- 
tive positions.  In  other  industries,  especially  textile 
manufacture,  labor  organizations  sprang  up  but  had 
only  a  weak  and,  almost  without  exception,  ephemeral 
existence  before  the  revolution.  Even  as  late  as  1908 
the  president  of  the  Grand  League  of  Railroad  Workers 
reported  the  unions  as  including  only  the  Grand  League 
of  Railroad  Workers,  10,000  members;  the  mechanics' 
union,  500;  the  boilermakers'  union,  800;  the  cigar- 
makers'  union,  1,500;  the  carpenters'  union,  1,500;  the 
shop  blacksmiths'  union,  800;  and  the  steel  and  smelter 
workers'  union,  600.5 

During  the  revolution,  labor  organization  increased 
rapidly.  Unions  of  all  sorts  sprang  up  overnight  un- 
der the  leadership  of  men  who  recognized  not  at  all  the 
limitations  of  those  in  whose  interests  they  professed 
to  be  working.  Workers  in  mines  and  textile  indus- 
tries, stevedores,  public  employees,  clerks,  barbers, 
street  car  men,  coachmen,  waiters,  and  a  large  number 
of  other  groups,  formerly  unorganized,  had  their  unions 
and,  under  the  most  irresponsible  leadership,  made  de- 

5  From  figures  published  by  John  Kenneth  Turner,  Barbarous 
Mexico,  Chicago, 


142    MEXICO  AND  ITS  RECONSTRUCTION 

mands  upon  the  employers.  This  kept  labor  conditions 
generally  in  a  turmoil. 

The  years  of  the  revolution,  with  the  exception  of 
the  period  of  control  of  Huerta,  are  ones  in  which  there 
has  been  a  rapid  growth  of  labor  legislation.  The  >ta- 
dero  government  announced  itself  the  champion  of  the 
downtrodden,  particularly  of  the  laboring  classes.  The 
Carranza  government  professed  even  greater  enthu- 
siasm in  their  defense  and  improvement  of  the  condi- 
tion of  the  laborer  has  been  at  least  nominally  a  part  of 
the  political  problem  of  its  successors.  The  Madero 
government  created  a  Bureau  of  Labor,  which  subse- 
quently became  a  Department.  It  intervened  in  a  num- 
ber of  strikes  and  succeeded  in  getting  better  hours  and 
wages  for  the  laborers  in  the  textile  industry.  No  im- 
portant labor  legislation  was  passed  in  the  latter  part 
of  the  period  of  Madero's  control,  though  a  large  num- 
ber of  proposals  were  made  to  Congress. 

When  the  radicals  came  back  under  Carranza,  the 
demand  for  labor  legislation  became  insistent  in  both 
the  central  and  the  state  governments.  The  support- 
ers of  the  government  included  the  great  majority  of 
the  young  radicals.  The  measures  taken  with  the  an- 
nounced intent  of  helping  the  workers  had  a  wide  range 
and  were  often  little  short  of  fantastic  in  their  opera- 
tion. It  is  impossible  to  digest  them.  Examples  illus- 
trate their  general  trend.  There  were  efforts  to  pro- 
hibit bullfights,  cockfights,  lotteries,  the  pulque  trade 
and  even  all  liquor  production.  Not  all  the  country 
would  follow  the  lead  of  those  who  wished  to  do  away 
with  these  alleged  harmful  diversions,  and  some  states, 


WAGES  AND  DEMANDS  OF  LABOR    143 

which  professed  to  do  so,  did  not  enforce  the  laws  passed 
strictly.  The  effort  to  do  away  with  the  pulque  trade 
in  the  federal  district,  for  example,  became  one  to  re- 
duce the  number  of  shops  where  it  was  dispensed.  Yu- 
catan, which  boasted  itself  a  dry  state,  was  so  on  little 
more  than  the  surface. 

Besides  these  general  social  legislation  measures, 
there  were  others  designed  to  benefit  labor  at  the  ex- 
pense of  the  hacendados,  and  factory  and  mine  owners, 
and,  in  fact,  all  the  interests  that  were  looked  upon  as 
representing  the  capitalistic  regime  recently  overthrown. 
Hours  of  labor  for  men,  women,  and  children;  rates  of 
wages;  peons'  wages;  peons'  debts;  employers'  liability; 
settlement  of  industrial  disputes;  the  holding  of  large 
estates;  and  an  indefinite  list  of  similar  subjects  were 
regulated  by  new  legislation.  Often  these  measures 
adopted  the  most  advanced  standards  of  legislation 
found  in  European  countries  or  the  United  States,  too 
frequently  they  aimed  to  put  into  effect  the  extreme 
demands  of  the  ultra  radicals  in  these  countries.  There 
was  little  consideration  given  to  the  question  of  the  ap- 
plicability of  the  proposed  standards  to  Mexican  condi- 
tions. 

Of  course,  some  measures  could  be  forced  upon  the 
interests  affected  under  threats,  such  as  confiscation  of 
property  or  the  taking  over  of  its  operation  by  the  local 
governmental  authorities.  Others,  for  example,  those 
involving  land  settlements,  could  be  pushed  through  by 
taking  property  under  at  least  the  form  of  legal  process 
and  distributing  it  to  the  persons,  whose  rights,  it  was 
alleged,  former  legislation  had  disregarded.  This,  for 


144    MEXICO  AND  ITS  RECONSTRUCTION 

example,  was  done  in  numerous  cases  in  the  State  of 
Puebla.  In  other  cases  the  legislation  was  so  unsuited 
to  local  conditions  that  it  resulted  in  little  more  than 
arousing  the  hopes  of  the  laborers  only  to  disappoint 
them  and  to  make  social  conditions  on  that  account  in- 
creasingly difficult. 

While  these  developments  were  in  process,  the  Con- 
stitution of  1917  was  adopted.  It  reflected  the  con- 
ditions amid  which  it  was  drafted.  Many  subjects  that 
are  obviously  ones  that  should  be  handled  by  legisla- 
tive authority  were  crystallized  into  the  new  "funda- 
mental law"  in  the  attempt  to  guarantee  to  the  hum- 
bler classes  of  the  population  rights  that  it  was  feared 
would  not  be  assured  if  left  to  be  guaranteed  by  ordi- 
nary legislation. 

It  is  not  to  be  wondered  at  if  the  agitators  of  the  revo- 
lution found  the  Mexican  laboring  classes  fertile  ground 
for  propaganda.  The  agricultural  laborer,  who  is  still 
the  typical  laborer  in  Mexico,  had  little  to  lose  by  the 
disturbance  of  the  social  order.  He  received  the  mini- 
mum of  subsistence  and  a  revolutionary  band  offered 
him  at  least  that  plus  diversion  which,  even  if  of  a 
rough  sort,  furnished  an  acceptable  contrast  to  his  daily 
life.  Though  he  was  not  at  heart  dissatisfied,  the  glow- 
ing picture  which  the  revolutionist  orators  painted  was 
so  attractive  that  it  overcame  his  native  conservatism. 
That  such  men  joined  the  revolution  blindly  and  with- 
out a  clear  conception  of  what  their  specific  grievances 
were,  nor  of  the  means  by  which  they  could  be  righted, 
is  doubtless  true.  That  they  joined  at  all  is  significant. 
The  fact  that  there  could  be  aroused  within  them  a 


WAGES  AND  DEMANDS  OF  LABOR    145 

spirit  of  revolt  against  the  conditions  under  which  they 
lived  was  an  indication  of  the  possibility  of  awakening 
new  desires,  which,  properly  guided,  may  prove  one  of 
the  means  through  which  the  economic  life  of  Mexico 
may  be  transformed  and  the  foundation  laid  for  a  new 
system  of  government  more  nearly  approaching  the 
democratic  standards  to  which  Mexico  aspires. 

Among  industrial  workers  there  appears  to  have  been 
less  voluntary  enlistment  in  revolutionary  activities 
proper  but  the  disturbed  conditions,  which  marked  the 
passing  of  the  old  regime,  were  not  without  important 
effects  upon  their  labor  conditions  also.  The  changing 
fortunes  of  the  revolutionary  leaders  brought  to  vari- 
ous industries  alternating  periods  of  great  activity  and 
slack  work.  Labor  organizers  found  those  working  in 
industry  ready  listeners,  as  easily  molded  as  the  peons. 
Long  established  custom  was  being  broken  down  all 
around  them.  This  was  the  dawn  of  a  new  day.  The 
standards  of  hours,  wages,  and  living  conditions  enjoyed 
by  laborers  in  other  lands  were  pictured  in  glowing 
colors.  The  Mexican  workman  could  enjoy  the  same 
blessings  if  he  would  but  reach  out  his  hands. 

That  there  were  abuses  in  the  industrial  life  of  Mex- 
ico, even  though  it  was  but  little  developed,  is  beyond 
dispute.  The  quickest  way  to  bring  remedy  to  wrongs 
of  which  any  class  is  conscious  is,  of  course,  for  that 
class  to  put  pressure  on  those  responsible  and  this  the 
industrial  workers  were  assured  was  their  opportunity. 
Unfortunately  the  labor  leadership  in  Mexico,  even  if 
of  good  intentions,  was  far  from  wise.  It  was,  it  ap- 
pears, chiefly  of  Mexican  origin,  irresponsible  and  lead- 


146    MEXICO  AND  ITS  RECONSTRUCTION 

ing  an  impressionable  following,  whose  hopes  all  the 
revolutionary  governments  appear  to  have  done  much 
to  encourage.  It  is  not  to  be  wondered  at  if  the  con- 
ditions that  developed  were  often  weird  in  the  extreme. 

In  the  textile  mills,  for  example,  syndicates  set  out 
on  an  ambitious  program  the  most  remarkable  thing 
about  which,  considering  the  character  of  the  elements 
from  which  it  received  its  support,  is  not  that  it  has 
not  worked  with  any  marked  degree  of  success  but  that 
it  had  the  measure  of  success  it  did  achieve.  The  unions 
forced  from  the  mill  owners  successive  increases  of  pay, 
they  put  pressure  on  the  workers  that  made  them  all 
join  the  syndicate.  They  succeeded  in  unionizing  shops 
with  remarkable  rapidity.  They  established  resistance 
funds  by  levy  on  the  income  of  each  man,  which  were 
used  not  only  for  carrying  on  the  fight  against  the  local 
employer,  but  even  in  aiding  the  strikes  of  fellow  work- 
men in  other  cities — witness  the  support  furnished  by 
the  workmen  of  the  Rio  Blanco  Mills  to  those  of  Puebla 
in  1918. 

The  extreme  methods  of  class  warfare  were  common. 
Sabotage  by  cutting  of  cloth  in  the  textile  mills  was  fre- 
quent. Theft  of  yarn  and  cloth  reached  a  point  never 
before  approached.  Inspection  was  ineffectual  because 
inspectors  were  intimidated.  The  guilty  caught  in  the 
act  could  not  be  convicted,  because  the  laborers  con- 
trolled the  courts.  In  the  old  days  the  workers  declared 
they  were  nothing  in  the  government  and  the  employers 
were  everything.  Now  the  shoe  was  on  the  other  foot. 

Neither  the  leadership  of  these  movements  nor  their 
methods  deserve  approval.  Neither  could  have  had 


WAGES  AND  DEMANDS  OF  LABOR    147 

such  wide  success  as  they  achieved  among  a  working 
population  truly  awake  to  its  own  interests  and  dealing 
with  a  responsible  government  anxious  to  advance  the 
interests  of  the  people  it  served. 

Nevertheless,  here  as  in  the  protest  of  the  agricul- 
tural population,  although  the  dissatisfaction  with  old 
conditions  resulted  in  a  following  of  irresponsible  and 
ill-advised  leadership  and  the  adoption  of  indefensible 
methods  to  try  to  secure  laudable  ends,  the  fact  that  the 
dissatisfaction  with  the  old  system  did  result  in  protest 
is  encouraging.  A  laboring  population  that  meekly  ac- 
cepts every  rule  made  by  the  employer  is  servile.  The 
first  requisite  for  a  fair  adjustment  between  employers 
and  employed  is  the  recognition  by  both  that  each  has 
rights  and  responsibilities. 

Before  the  Mexican  laborer  can  enjoy  the  solid  bene- 
fits that  should  come  to  him  from  the  break-up  of  the 
old  regime  and  enter  a  working  world  in  which  he  will 
enjoy  greater  independence  and  greater  rights  than  he 
has  had  heretofore,  he  must  unlearn  much  of  what  his 
teachers  have  taught  him.  He  must  first  of  all  learn 
that  greater  independence  means  greater  responsibility 
and  that  privileges  are  paid  for  by  sacrifice.  The  old 
system  had  much  that  was  indefensible  about  it,  the 
ideals  toward  which  his  self-appointed  leaders  turned 
his  ambition  were  often  impractical.  Those  who  are 
intelligently  to  lead  the  Mexican  laboring  classes  to  re- 
fuse to  allow  the  return  of  the  old  abuses  and  to  avoid 
new  ones  have  a  delicate  task  before  them.  It  is  one 
that  is  the  more  difficult  because  of  the  present  limita- 
tions of  those  whom  they  attempt  to  serve. 


CHAPTER  XII 

THE  MEXICAN  LABORER:    HIS  OPPORTUNITIES 

IT  is  safe  to  say  that  no  great  colonizing  power  ever 
handled  the  land  problems  that  confronted  it  in  a  new 
and  sparsely  settled  territory  in  a  way  that  later  gen- 
erations have  found  satisfactory.  To  those  who,  in  the 
age  of  discovery,  set  out  to  increase  the  national  domain, 
the  home  governments  gave  grants  of  what  they  found 
— land.  Had  these  large  early  grants,  often  with  the 
most  indefinite  boundaries,  continued  in  the  hands  of 
their  original  owners  they  would  have  been  a  great  abuse 
in  practically  all  the  colonies  of  the  world.  But  they 
very  seldom  did  so.  The  estates  fell  apart  by  their  own 
unwieldiness.  Accumulations  of  property  by  institu- 
tions, notably  the  church,  often  held  together  to  a 
greater  degree  but  even  these  in  most  cases  later  broke 
up  by  the  development  of  new  economic  conditions  or  by 
political  measures  directed  against  the  holders. 

Mexico  is  no  exception  to  the  rule.  The  grants  of 
the  colonial  period  are  not  the  cause  of  present-day  land 
problems,  nor  is  the  church  an  element  that  complicates 
agrarian  conditions.  The  land  question  of  the  republic 
is  of  its  own  creation.  To  it  three  elements  have  promi- 
nently contributed,  the  tendency  of  the  upper  classes 
to  put  their  capital  into  land  rather  than  into  industrial 
ventures,  the  breaking  up  of  the  communal  land  hold- 

148 


THE  OPPORTUNITIES  OF  LABOR    149 

ings  of  the  Indian  communities,  and  the  disposal  of  "un- 
occupied lands"  by  the  government. 

Many  of  the  great  estates  in  Mexico  arise  from  a  char- 
acteristic common  to  many  countries  of  Spanish  civiliza- 
tion. Wealth  is  considered  by  the  local  society  to  be 
synonymous  with  landed  property.  Extensive  real  es- 
tate holdings  give  a  family  position  to  a  greater  extent 
than  other  forms  of  capital.  The  preference  does  not 
depend  only  on  the  belief  that  real  estate  is  less  dis- 
turbed by  revolution  than  industrial  property.  It  is 
due,  also,  to  tradition.  There  can  be  no  doubt  that  many 
of  the  large  estates,  because  of  their  very  size,  have 
been  a  burden  to  their  owners  and  that  smaller  areas 
could  have  been  better  administered  and  made  to  yield 
a  better  net  return.  Of  the  three  elements  above  men- 
tioned this  is,  however,  the  least  important. 

The  Spanish  land  policy  included  the  granting  to  the 
Indian  villages  of  certain  areas,  called  ejidos,  which 
were  held  in  common.  This  practice  was  inherited,  and 
for  a  generation  continued,  by  the  republic.  In  the 
law  of  June  25,  1856,  steps  were  taken  for  the  distribu- 
tion of  community  lands  in  lots  of  the  value  of  $200  or 
less.  No  measures  were  taken,  however,  to  insure  that 
the  new  proprietors  should  be  instructed  how  to  cul- 
tivate their  lands  to  the  best  advantage,  nor  was  legisla- 
tion enacted  to  prevent  the  prompt  alienation  of  their 
holdings.1  As  a  result,  a  measure  intended  to  stimulate 

1  The  abuses  practiced  especially  in  the  north  and  west  in  the 
disposition  of  the  community  lands  are  described  by  R.  B.  Brins- 
made,  El  latifundismo  Mexicano,  su  origen  y  su  remedio,  Mexico, 
1916. 


150    MEXICO  AND  ITS  RECONSTRUCTION 

individual  initiative  and  to  encourage  Indians  to  become 
citizens  of  the  republic,  with  rights  and  responsibilities 
similar  to  those  of  the  more  enterprising  classes,  failed. 
The  lands  were  sold  and  the  native,  who  formerly  had, 
in  his  communal  rights,  at  least  a  claim  on  a  living  of 
the  standard  to  which  he  had  been  accustomed  for  gen- 
erations, was  thrown  on  the  community  landless  and  de- 
pendent. 

The  policy  that  resulted  in  this  state  of  affairs  has 
been  condemned  both  in  and  out  of  Mexico  and  the  revo- 
lution favored  attempts  in  all  parts  of  the  country  to 
restore  the  old  status.  Such  steps  have  not  succeeded. 
It  is  seldom  possible,  after  any  important  change  in  so- 
cial or  economic  relations,  to  turn  back  the  clock  and 
start  anew.  It  is  very  doubtful  whether  it  would  be  to 
the  advantage  of  Mexico  to  reestablish  any  large  por- 
tion of  the  Indian  population  on  a  communal  basis  of 
life.  Land  is  never  used  to  advantage,  at  least  under 
modern  conditions,  where  it  is  held  in  that  way.  Other 
countries,  notably  the  United  States,  have  made  similar 
errors  in  trying  to  shift  the  indigenous  populations  too 
rapidly  from  the  old  to  a  new  standard  of  life,  but  the 
step  once  taken  can  not  be  retraced.  The  failure  to 
surround  the  elimination  of  the  ejidos  with  proper  safe- 
guards has  complicated  the  Mexican  land  problem,  yet 
former  conditions  can  not  be  restored  by  any  legislative 
act. 

In  its  desire  to  encourage  the  development  of  its  agri- 
cultural resources  Mexico  found  itself  at  the  winning 
of  independence  in  a  peculiar  position.  It  had  large  ex- 
tents of  public  land,  at  least  land  that  belonged  tech- 


THE  OPPORTUNITIES  OF  LABOR    151 

nically  to  the  state,  inasmuch  as  no  one  held  legal  title 
thereto.  But  a  survey  of  the  national  territory  had 
never  been  made  and  the  public  authorities  of  neither 
the  nation  nor  of  the  states  could  inform  inquirers  where 
the  "unoccupied"  land  lay.  In  fact,  land  legally  un- 
occupied might  have  been  actually  subject  to  possession 
by  individuals  for  generations. 

The  obvious  first  step,  if  private  property  rights  were 
to  be  given  adequate  protection,  would  have  been  to 
carry  out  a  government  survey  of  the  territory  and  to 
try  to  protect  those  who  were  ignorant  of  the  insecurity 
of  their  titles.  Unfortunately  the  government  did  not 
feel  itself  financially  able  to  adopt  this  plan.  Until 
after  the  middle  of  the  century  there  was  no  plan  upon 
which  action  had  been  taken  sufficient  to  allow  it  to  be 
called  a  national  policy  for  the  management  of  the  pub- 
lic lands.  In  1863  a  law  was  passed  outlining  the  con- 
ditions under  which  individuals  might  secure  ownership 
of  the  terrenos  baldios,  unoccupied  lands.  For  the  mo- 
ment, however,  the  French  intervention  kept  the  policy 
from  any  practical  application.  With  the  restoration 
of  the  republic  in  1867  sales  became  important.  By 
1876,  an  area  of  1,376,169  hectares  had  been  distributed, 
yielding,  by  the  prevailing  schedule  of  prices,  $292,- 
736.30.  From  1877  to  1890  the  lands  were  alienated 
at  a  much  more  rapid  rate.  A  total  of  33,929,256  hec- 
tares were  adjudicated,  valued  at  $4,421,656.80.2  The 
states  in  which  the  greatest  distribution  occurred  in  this 

2  Luis  Pombo,  Mexico:  1876-1892,  Mexico,  1893,  p.  39,  from 
figures  quoted  from  official  publications.  Other  figures  are  pub- 
lished on  p.  47. 


152    MEXICO  AND  ITS  RECONSTRUCTION 

period  were  in  the  dry  belt  immediately  south  of  the 
United  States.  In  Lower  California  9,800,000  hectares 
were  sold ;  in  Chihuahua,  9,000,000 ;  in  Coahuila,  7,000,- 
000;  in  Sonora,  3,600,000;  in  Durango,  1,300,000,  and 
in  Sinaloa,  1,100,000.  Up  to  the  middle  '80s  practically 
all  the  lands  distributed  went  to  Mexicans.  In  1883  the 
American  Minister  declared  that  no  American  in  his 
senses  would  try  to  locate  and  claim  any  land  because 
of  the  disputes  for  ownership  that  would  be  sure  to  fol- 
low. In  the  years  that  followed,  however,  the  survey  of 
terrenos  baldios  went  on  very  rapidly  by  companies,  na- 
tive and  foreign.  They  obtained  shares  of  the  land  sur- 
veyed in  payment  for  their  work.  The  contracts  were 
undertaken  under  the  law  of  December  15,  1883,  re- 
garding survey  and  colonization  of  public  lands  and  un- 
der a  series  of  laws  passed  between  1889  and  1894 
known  as  the  Leyes  de  Deslindes.  These  measures  have 
been  criticized  severely  for  failure  to  protect  the  pub- 
lic interests.  Up  to  1889  there  had  been  surveys  author- 
ized for  38,249,373  hectares,  of  which  12,693,610  be- 
longed to  the  surveying  companies,  14,618,980  were 
segregated  for  various  reasons,  and  10,936,783  hectares, 
or  some  26  per  cent,  remained  at  the  disposal  of  the 
government.  From  that  time  to  April,  1892,  3,011,440 
acres  were  surveyed.  Statistics  for  later  years  do  not 
appear  to  have  been  published. 

That  there  were  abuses  in  carrying  out  the  disposal 
of  lands  is  beyond  doubt.  The  "squatters"  were  fre- 
quently dispossessed  of  holdings  of  which  they  had  long 
been  in  actual  possession.  The  surveying  companies 
which  took  contracts  from  the  government  often  did 


THE  OPPORTUNITIES  OF  LABOR    153 

their  work  in  a  haphazard  manner  and  received  very 
large  grants  in  return  for  very  small  services.  The 
government  sold  large  areas  at  very  low  prices.  Sub- 
sequent writers  have  been  unsparing  in  their  criticism 
of  the  policy  that  allowed  such  things  to  occur  to  the 
disadvantage  of  the  public  treasury. 

It  is  doubtful  whether  the  real  abuse  lies  in  the  rate 
at  which  the  lands  were  sold.  After  all,  the  settler  who 
goes  into  a  rough,  undeveloped  country  creates  all  but 
a  small  portion  of  the  value  of  the  land  he  occupies  and 
it  is  at  least  open  to  doubt  whether  a  country  in  the  posi- 
tion in  which  Mexico  found  itself  might  not  well  afford 
to  give  generously  of  her  public  land  to  actual  settlers. 
The  increase  of  the  national  wealth  caused  by  their  in- 
dustry would  be  more  important  than  the  payments  for 
the  land. 

The  real  abuses  lie  in  the  other  circumstances 
sketched.  The  rights  of  those  in  possession  were  inef- 
fectually guarded.  The  purchasers  were  not,  as  a  rule, 
themselves  settlers.  Often  their  contracts  provided  that 
they  must  bring  in  families  who  would  exploit  the  land, 
but  these  provisions  were  not  enforced.  In  other  words, 
though  Mexico  could  have  given  her  public  land  to  set- 
tlers for  small  payments  and  still  be  considered  for- 
tunate, what  happened  was  that  many  of  her  small 
farmers  were  dispossessed,  and  she  sold  her  lands  for 
negligible  amounts  and  did  not  get  the  settlement  that 
would  have  been  her  chief  reward. 

Under  79  contracts  for  colonization  entered  into  be- 
tween 1878  and  1889 — about  one-half  of  the  total  being 
made  in  1883-4 — only  some  6,000  colonists  had  been 


154    MEXICO  AND  ITS  RECONSTRUCTION 

brought  into  the  country.  The  number  reported  in 
1892  was  only  10,985,  and  the  later  years  for  which 
statistics  are  not  available  have  brought  no  real  im- 
provement. 

It  is  not  possible  to  state  exactly  to  what  degree  large 
land  holdings  came  to  prevail  in  Mexico  before  the  revo- 
lution. No  public  record  shows  the  development  in  a 
satisfactory  way  and  discussions  by  private  writers  are 
almost  without  exception  propagandist.  That  there 
were  many  enormous  holdings  and  that  they  were  an 
abuse,  is  beyond  question.  A  few  examples  may  be 
cited.  Before  the  revolution  Luis  Terrazas  was  cred- 
ited with  holdings  in  Chihuahua  of  a  larger  area  than 
the  sovereign  state  of  Costa  Rica ;  other  large  properties 
were  those  of  Jose  Escandon  in  Zacatecas,  Ifiigo  No- 
riega in  Mexico,  Garcia  Pimentel  in  Morelos,  Juventino 
Ramirez  in  Puebla,  and  the  extensive  possessions  of  the 
Madero  family  in  Coahuila.  In  the  sparsely  populated 
Lower  California  there  are  some  enormous  extents  of 
territory  held  by  land  companies.  Three  companies  it 
is  asserted  acquired  93,798  square  kilometers,  an  area 
larger  than  Ireland.  Luis  Haller  and  Company  owned 
53,950  square  kilometers;  the  California  and  Mexican 
Land  Company,  Ltd.,  24,883;  and  Flores  and  Com- 
pany, 14,965.  It  is  asserted  that  the  18  largest  land 
companies  had  an  average  possession  half  as  great  as 
Portugal  and  that  11,000  haciendas  comprised  880,000 
square  kilometers  or  44  per  cent  of  the  total  area  of  the 
republic.3  ,The  state  of  Morelos  is  alleged  to  have  de- 


B. Brinsmade,  op.  clt.t  pp.  10-13.    See  also  Manuel  Calero, 

i 


THE  OPPORTUNITIES  OF  LABOR     155 

veloped  the  most  intolerable  conditions.  Thirty-two 
men  are  reported  to  have  "owned"  practically  the  en- 
tire area.4 

That  the  large  estate  system  was  not  a  wholesome 
element  in  the  life  of  the  republic  the  government  of 
Diaz  had  recognized.  The  reports  by  the  Department 
of  Fomento  protested  against  it.  The  economists  of 
the  country,  while  recognizing  that  there  were  certain 
regions  that  could  prosper  only  under  extensive  cultiva- 
tion and  that  certain  crops  could  not,  under  the  condi- 
tions obtaining,  be  profitably  cultivated  on  a  basis  of 
peasant  ownership  of  land,  were  in  general  agreement 
that  some  change  must  come.5  But  their  beliefs  did  not 
take  form  in  action. 

Unwillingness  to  attack  the  problem  has  not  charac- 
terized the  revolutionary  reformers.  The  abolition  of 
latifundismo  has  been  a  prominent  part  of  their  pro- 
gram. The  end  toward  which  they  have  declared  their 
intention  to  work  is  one  that  meets  general  approval. 
The  reasoning  and  the  methods  adopted,  however,  do 
not  show  that  there  has  yet  been  worked  out  a  land  pol" 
icy  from  which  permanent  improvement  may  be  ex- 
pected. 

The  central  idea  in  the  radical  discussion  of  land  prob- 
lems during  the  revolution  has  been  that  the  native  popu- 

Ensayo  sqfrre  la  reconstruction  de  Mexico,  New  York,  1920,  p. 
105  et  seq. 

4  See  a  detailed  but  uncritical  discussion  of  the  land  problem 
in  F.  Gonzalez  Roa,  The  Mexican  People  and  Their  Detractors,  New 
Yprk,  1916,  p.  1  et  seq. 

8  Luis  Pombo,  op.  cit.t  p.  44  et  seq. 


156    MEXICO  AND  ITS  RECONSTRUCTION 

lation  is  inspired  by  a  hunger  for  possession  of  land. 
One  of  the  manifestos  issued  reads  in  part:6 

The  man  of  the  fields  was  hungry  and  full  of  misery ;  he  had 
been  exploited  beyond  endurance  and  at  last  he  took  up  arms  to 
win  the  bread  which  the  rich  in  their  greed  had  denied  him ;  to 
obtain  possession  of  the  lands  which  were  in  the  grasp  of  the 
selfish  proprietors.  .  .  .  He  embarked  upon  revolution,  not  to 
win  illusory  political  rights  which  fail  to  provide  food,  but  to 
procure  a  bit  of  ground  which  would  yield  him  bread,  liberty, 
a  home,  independence,  and  a  chance  to  get  ahead.  .  .  .  The 
greater  part,  if  not  all  of  the  territory,  which  must  be  "national- 
ized" represents  land  wrested  from  some  small  proprietors  with 
the  connivance  of  the  Diaz  dictatorship.  The  second  aim  is 
the  restoration  of  these  lands  to  their  original  individual  owners, 
and  to  the  .  .  .  pueblos.  This  great  act  of  justice  will  be 
followed  by  presenting  those  who  never  had  anything  with  a 
portion  of  the  lands  confiscated  from  the  accomplices  of  dic- 
tatorship, or  expropriated  from  the  spendthrift  heirs  of  the 
old  land  robbers,  who  do  not  even  trouble  themselves  to  cultivate 
their  inheritance.  Thus  will  the  hunger  for  land  and  the  appe- 
tite for  liberty,  which  are  felt  from  one  end  of  the  republic  to 
;the  other  be  satisfied. 

There  is  little  to  show  that  any  such  general  land 
hunger  exists  among  the  peasant  population.  Except 
in  a  few  districts  desire  for  land  on  the  part  of  the  lower 
classes  was  conspicuous  by  its  absence  before  the  revo- 
lution and  is  not  general  now. 

0  The  manifesto  of  Zapata  from  which  these  extracts  are  taken 
was  published  in  the  Voz  de  Juarez,  of  Mexico  City,  August  20, 
1914,  and  later  republished  in  part  in  the  Review  of  Reviews,  vol. 
50,  p.  630,  November,  1914.  Though  issued  by  the  leader  of  the 
state  where  land  hunger  it  is  alleged  did  exist,  the  declaration 
applied  to  the  whole  of  the  republic. 


THE  OPPORTUNITIES  OF  LABOR    157 

The  remedies  adopted  to  eliminate  the  prevalent 
abuses  are  not  above  question.  It  is  impossible  to  re- 
turn the  destroyed  ejidos  to  their  original  owners,  and 
to  give  them  to  their  landless  descendants,  even  when 
these  can  be  discovered,  is  not  a  step  that  promises  to 
solve  the  land  problem.  The  measures  for  taking  over 
land  from  the  larger  estates  and  dividing  it  among  the 
peons  are  also  too  simple  to  inspire  confidence.  The 
fact  is  the  land  problem  in  Mexico  is  much  more  com- 
plicated than  the  revolutionary  reformers  seem  to  have 
conceived  it.  It  is  a  psychological  problem  more  than 
a  physical  one.  The  land  hunger  of  the  peasant  does 
not  now  need  to  be  satisfied,  it  needs  to  be  created. 

There  are  large  areas  in  Mexico  in  which  the  price 
of  land  is  still  ridiculously  low.  The  landowners  com- 
plain of  a  lack  of  labor  supply  and  many  of  them  would 
welcome  an  opportunity  to  sell  small  holdings  in  order 
to  get  the  laborers  fixed  in  their  neighborhoods.  Such 
men  could  be  counted  on  to  furnish  an  auxiliary  labor 
supply  when  their  time  was  not  demanded  by  their  own 
properties. 

It  must  be  remembered  too  that  most  of  the  large 
landholdings  are  in  regions  unsuited  to  small  ownership. 
In  such  areas  the  "forty  acres  and  a  mule"  standard  of 
property  endowment,  which  was  talked  of  in  the  United 
States  for  the  Southern  negro  at  the  end  of  the  Civil 
War,  would  be  no  measure  of  blessing  to  a  peon.  It 
would  mean  starvation  for  both  the  animal  and  his 
owner.  In  some  of  the  regions,  where  large  properties 
lie,  irrigation  might  make  small  ownership  practicable. 
But,  unfortunately  for  Mexico,  irrigation  developments 


158    MEXICO  AND  ITS  RECONSTRUCTION 

imply  a  technical  ability  and  resources  that  the  Govern- 
ment of  Mexico  has  not  been  able  to  supply  and  will 
not  be  able  to  supply  for  a  long  time  to  come.  Such 
developments  require  also  the  investment  of  large 
amounts  of  private  capital.  Until  security  for  property 
can  be  well  assured,  investments  of  this  sort  will  con- 
tinue to  be  rare  exceptions. 

After  all  is  said,  it  must  be  frankly  admitted  that  a 
great  portion  of  Mexico,  if  it  is  to  yield  as  it  should, 
must  be  held,  so  far  as  the  present  generation  can  see, 
in  large  units.  Enthusiasts  may  prove  the  possibility  of 
utilization  of  running  water  for  irrigation  and  the  stor- 
age of  rainfall  in  huge  reservoirs  for  the  same  purpose. 
By  such  means  immense  areas  may  theoretically  be  made 
highly  productive  and  suitable  for  cultivation  by  small 
proprietors,  especially  educated  for  their  tasks.  The 
great  majority  of  such  schemes  are,  so  far  as  our  pres- 
ent knowledge  of  engineering  and  construction  costs  in- 
dicate, ones  that  will  not  leave  the  realm  of  dreams.7 

Small  land  holdings,  to  be  successful,  must  be  set  up 
where  there  is  a  desire  for  them.  If  the  reformers  turn 
their  attention  to  the  task  of  creating  the  demand  for 
homesteads,  they  will  have  set  their  hands  to  a  task,  the 
importance  of  which  it  is  almost  impossible  to  overem- 
phasize. No  country  that  aims  to  be  a  democracy  can 
overlook  the  importance  of  the  conditions  under  which 
its  real  estate  is  held.  Where  there  never  has  been 

7  See  a  discussion  of  the  merits  of  various  irrigation  schemes 
presented  and  an  interesting  discussion  of  the  colonization  problem 
in  general  in  Alberto  Robles  Gil,  Memoria  de  la  secretaria  de  f omen- 
to  presentada  al  congreso  de  la  union,  Mexico,  1913,  passim. 


THE  OPPORTUNITIES  OF  LABOR     159 

or  where  there  has  ceased  to  be  a  large  class  of 
property  owners  living  on  the  soil  they  own,  true  repub- 
lican government  does  not  flourish.  The  possession  of 
no  other  sort  of  wealth  so  surely  stimulates  respect  for 
the  rights  of  others  and  love  of  order  and  progress  as 
does  the  possession  of  land.  There  is  no  other  that 
makes  its  owner  realize  so  clearly  that  the  state  is  the 
guarantor  of  his  well-being  and  that,  by  supporting  it, 
he  is  working  for  his  own  advantage  and  for  that  of  his 
community. 

From  this  point  of  view  there  is,  indeed,  a  land  prob- 
lem in  Mexico.  The  average  Mexican  does  not  crave 
land  ownership.  He  has  not  thought  of  it,  because  it 
is  a  privilege  never  enjoyed  either  by  him  or  by  his  for- 
bears. Giving  him  land  alone  will  not  create  the  desire 
to  keep  it.  Any  unguarded  division  scheme  will  soon 
disillusion  those  who  foster  it,  because  the  small  peasant 
ownership  will  vanish  as  did  that  created  by  the  laws 
that  divided  up  the  ejidos.  More  than  such  a  simple  for- 
mula is  needed :  the  creation  of  conditions  that  will  give 
the  Indian  land,  keep  him  on  it,  and  stimulate  his  de- 
sires so  that  he  will  use  it  intelligently.  Without  this 
there  will  be  no  solution  of  the  Mexican  land  problem 
worthy  of  the  name.  It  is  here  that  the  land  question 
shows  its  human  side.  It  is  more  a  problem  involving 
the  capacity  of  the  population  of  Mexico  than  the  divi- 
sion of  its  acres.  Legislation  can  be  adopted  that  will 
break  up  the  big  estates  where  that  is  needed  for  the 
best  development  of  the  country  and  legislation  can 
help  the  landless  to  acquire  land  by  loans  of  credit  and 
the  other  expedients  made  familiar  by;  the  experience 


160    MEXICO  AND  ITS  RECONSTRUCTION 

of  other  countries ;  but  the  economic  impulse  cannot  be 
created  by  fiat.  It  can  be  fostered  by  building  up 
around  the  people  a  complex  of  social  conditions  that 
emphasizes  the  desire  to  enjoy  the  best  that  the  com- 
munity offers.  The  love  of  family,  the  property  sense, 
emulation  of  the  economic  success  of  others,  the  desire 
for  influence  in  the  community  and  for  the  applause  of 
his  fellows,  pride  in  morality,  public  and  private,  these 
and  an  indefinite  number  of  similar  impulses  must  rouse 
the  common  citizen  of  Mexico,  if  the  "land  problem"  is 
to  be  attacked  with  any  real  success.  Whether  a  norm 
can  be  found  depends  more  on  the  capacity  of  the  Mex- 
ican people  than  upon  that  of  its  leaders.  These  latter 
can  contribute  to  shape  the  conditions  that  may  bring 
success,  but  all  their  efforts  will  be  in  vain  unless  the 
peon,  and  especially  the  Indian  peon,  shows  capacity 
to  become  a  citizen  in  fact  as  well  as  in  name.  He  must 
forsake  the  economic,  social,  and  civic  childhood  in  which 
he  has  lived  and  take  on  the  rights  and  responsibilities 
of  manhood. 


CHAPTER  XIII 

TRANSPORTATION 

AMONG  the  elements  in  the  life  of  Mexico,  each  of 
which  in  succession  seems  to  the  student  to  be  the  key 
that  will  open  the  door  for  the  establishment  of  a  well 
rounded  and  stable  civilization,  are  transportation  facil- 
ities.1 

In  the  colonial  period  transportation  was  improved  by 
the  introduction  of  riding,  burden,  and  draft  animals 
and  through  the  building  of  a  few  rough  roads  between 
the  principal  cities.  But  even  at  the  end  of  300  years 
of  Spanish  rule  the  number  of  pack  trails  was  small  and 
the  important  through  wagon  roads  fewer  still.  What 
passed  for  roads  did  exist  from  Mexico  to  Santa  Fe  and 
from  there  to  Vera  Cruz.  Between  Mexico  and  Aca- 
pulco  and  from  Mexico  to  Vera  Cruz  there  were  still 
only  pack  trails.  The  smaller  towns  were  communities 
practically  shut  off  from  the  rest  of  the  country  and  a 

1Only  the  internal  transportation  routes  are  here  discussed. 
Ocean  communication  has  shown  itself  more  easy  to  adjust  to  the 
demands  of  traffic.  The  steamship  services  at  the  present  time, 
too,  are  obviously  less  involved  in  the  reconstruction  in  Mexico  than 
are  the  roads  and  railroads.  They  are  more  easily  reestablished, 
their  facilities  have  suffered  less  in  the  revolution  and  will  rapidly 
respond  to  any  development  in  the  foreign  trade.  A  description 
of  the  development  of  ocean  communication  with  Mexico  up  to  1879 
is  found  in  Exposicion  de  la  secretaria  de  hacienda  de  los  estados 
unidos  mexicanos  de  15  de  enero  1879  .  .  .  Mexico,  1879. 

161 


162    MEXICO  AND  ITS  RECONSTRUCTION 

large  part  of  the  burden  bearing  continued  to  be  done 
by  Indian  carriers.2  In  the  rainy  season  communica- 
tion became  almost  impossible.  A  traveler,  in  1828, 
complains  of  the  roads:  "All  that  can  be  said  about 
them  is,  that  they  are  as  bad  as  they  possibly  can  be — 
passable  only  for  mules,  and  that,  often,  at  the  risk  of 
one's  life."  8 

The  very  high  cost  of  transportation,  which  resulted 
from  poor  facilities,  made  it  impossible  for  Mexico  to 
develop  trade  outside  the  immediate  zone  of  production 
in  any  but  highly  valuable  articles,  nor  could  foreign 
trade  fare  better.  Long  before  the  actual  building  of 
railroads  it  was  evident  to  the  more  farseeing  among  the 
population  that  the  stagnation  from  which  the  country 
suffered  was  due,  to  a  large  degree,  to  poor  transporta- 
tion facilities. 

The  first  railroad  built  emphasized  this  need  of  the 
country  at  large,  although  the  rates  charged  were  so 
high  that  it  continued  to  cost  more  to  take  a  ton  of  goods 
from  Vera  Cruz  to  Mexico  than  from  London  to  Vera 
Cruz.  As  soon  as  the  railway  reached  out  toward  the 
capital,  it  began  to  disturb  the  old  economic  conditions 
far  beyond  its  immediate  neighborhood,  illustrating  the 
benefits  that  were  to  come  from  rail  facilities  and  the 
great  disadvantages  that  would  fall  upon  cities  left  off 

2  Karl  Sapper,  Wirtschaftsgeographie  von  Mexico,  1908,  p.  31 
et  seq  and  Joseph  Nimmo  Jr.,  Commerce  between  the  United  States 
and  Mexico  .  .  .  Washington,  1884,  p.  20  et  seq. 

3 Mexican  Company;  extracts  from  the  report  of  Justus  Ludwig 
von  Uslar,  relative  to  the  Negotiation  of  Yavesia  in  the  State  of 
Oaxaca,  January  6,  1828. 


TRANSPORTATION  163 

the  new  routes.  Tampico,  for  example,  had  been  an  im- 
portant source  of  supply  in  the  old  days  for  a  number  of 
the  states  of  the  central  plateau  but,  after  the  railroad 
from  Vera  Cruz  to  Mexico  was  established,  the  trade 
of  the  table  lands  began  to  be  drained  off  southward  in- 
stead of  to  the  Gulf  port  to  the  east. 

As  to  railroad  policy,  public  opinion  began  to  divide 
into  two  camps.  In  one  were  those  who  saw  that  the 
new  day  for  Mexico  meant  investment  of  large  amounts 
of  foreign  capital  and  the  extension  of  the  American 
railway  net  southward  to  include  the  Mexican  system. 
In  the  other  were  the  conservatives,  who  shrank  from 
contact  with  the  aggressive  world  around  them  for  fear 
there  might  come  with  the  new  associations  influences 
that  would  threaten  the  independence  of  the  disorgan- 
ized fatherland. 

During  the  period  before  the  Diaz  regime  the  conflict 
between  those  who  wanted  the  building  of  railroads  and 
those  who  did  not  was  largely  theoretical,  for  railroad 
enterprise,  with  the  exception  of  the  line  to  Vera  Cruz, 
was  practically  unknown.  The  poverty  and  disorder, 
which  had  so  long  characterized  the  country,  made  cap- 
ital still  reluctant  to  invest.4  The  reestablishment  of 
what  appeared  to  be  a  lasting  peace  gradually  dispelled 
this  fear  and  capitalists  in  the  United  States  began  to 
look  more  favorably  on  Mexican  railway  projects,  but 
they  showed  a  disposition  not  to  invest  their  money  "un- 
less the  protection  of  the  Government  of  the  United 
States,  by  some  treaty  stipulation  or  other  convention, 

*  Papers  Relating  to  the  Foreign  Relations  of  the  United  States, 
1878,  p.  549. 


164    MEXICO  AND  ITS  RECONSTRUCTION 

goes  with  it."  At  the  same  time  the  less  sanguine  Mex- 
icans stiffened  their  opposition  to  railway  enterprise  and 
especially  American  railway  enterprise.  Many  illustra- 
tions of  these  prejudices  might  be  cited.  A  contract 
was  arranged  by  the  Mexican  executive  with  the  Inter- } 
national  Railroad  Company  of  Texas  in  1873,  which 
provided  that  all  the  capital,  shareholders,  employees, 
and  all  persons  connected  with  the  company  should  be 
considered  Mexicans  in  all  that  related  to  the  enterprise 
within  the  republic  and  could  not  maintain  claims  as 
foreigners  "even  when  alleging  denial  of  justice."  The 
charters  of  the  pre-Diaz  period  had  similar  clauses.  But 
though  companies  could  be  formed  on  such  a  basis,  get- 
ting the  money  to  put  through  the  project  under  such 
conditions  was  found  impossible.  Capital  was  wary. 
As  the  American  Minister  reported,  American  contrac- 
tors would  not  forswear  their  nationality  for  the  sake 
of  building  a  railroad  in  foreign  lands,  nor  renounce  the 
right  to  appeal  for  protection  to  their  own  government, 
a  right  recognized  by  international  law.5 

Whenever  railroads  were  under  discussion  in  the 
Mexican  Congress,  the  more  timid  showed  themselves 

8  Ibid.,  p.  639.  A  contract  of  November  12,  1877,  similar  to 
the  one  cited  above,  was  presented  to  tHe  Congress  in  which,  in  addi- 
tion to  forswearing  their  rights  as  Americans,  the  builders  were 
required  to  build  the  branch  to  the  American  border  northward 
from  a  point  in  Mexico  instead  of  southward  from  the  Rio  Grande. 
The  project  was  defeated  because  it  was  too  favorable  to  the  for- 
eigner. The  conditions  as  to  nationality  above  cited,  in  their  revival 
in  recent  legislation,  have  caused  widespread  protest.  They  are, 
in  fact,  no  new  thing.  They  were  already  a  familiar  feature  of 
railway  contracts  early  in  the  Diaz  regime.  Ibid.,  1879,  pp.  776-80. 


TRANSPORTATION  165 

convinced  that  the  border  was  in  great  danger  of  ad- 
vancing southward  with  the  rail  heads.  There  was  a 
firmly  rooted  suspicion  that  the  United  States  had  an 
ulterior  interest  in  every  move  taken  by  its  people  in- 
volving Mexico.  It  was  a  part  of  the  general  fear  of 
the  foreigner,  of  the  belief  that  the  only  safety  for  the 
weak  lay  in  playing  off  the  strong  against  each  other. 
Railway  building  in  itself,  it  was  recognized,  was  desir- 
able but  railways  to  the  northern  border  would  destroy 
the  natural  defenses  of  the  republic.  Although  the  bills 
introduced  into  Congress  included  provisions  to  the  ef- 
fect that  the  property  of  the  railroads  could  never  be 
made  the  subject  of  international  claims,  the  fear  of 
closer  neighborhood  with  the  United  States  was  so  great 
that  the  projects  met  repeated  defeat.8 

Contrary  to  popular  opinion  in  the  United  States 
even  Diaz  did  not  see,  from  the  beginning,  the  impor- 
tance of  railway  development  for  his  country.  At  least 
he  was  not  above  playing  upon  the  popular  prejudice 
against  the  foreigner  to  the  disadvantage  of  his  political 
enemies.  In  his  "plan"  dated  at  Palo  Blanco,  March 
21,  1876,  he  charges  the  Lerdo  government  with  having 
delivered  the  country  over  to  an  English  company  by 
the  grant  of  a  concession  to  the  Vera  Cruz  railroad.  He 
declared  that  it  had  been  agreed  to  transfer  the  English 
debt  to  the  United  States  "which  is  equivalent  to  selling 
the  country  to  the  neighboring  nation."  Such  projects 
"rob  us  of  our  future  and  sell  us  to  foreigners."  7 

6  The  Sonora  railroad  project  defeated.    Ibid.,  1880-1,  p.  719. 

7  An  extract  from  this  proclamation,  which  is  a  good  example 
of  revolutionary  rhetoric,  is  found  in  ibid.,  1879,  p.  780. 


166    MEXICO  AND  ITS  RECONSTRUCTION 

In  fact,  during  his  first  years  of  control  in  Mexican 
affairs,  Diaz  was  as  captious  with  the  rights  of  for- 
eigners as  have  been  some  of  his  successors.  In  the  first 
issue  of  the  Government  Gazette,  published  after  he  se- 
cured control  of  the  capital,  he  declared  null  railway 
contracts  made  by  his  predecessor.  He  later  forfeited 
railway  charters,  changed  schedules  of  railway  tariffs  in 
violation  of  contract,  and  confiscated  construction  work 
already  done.  The  following  quotation  from  a  speech 
in  the  National  Chamber  of  Deputies,  on  May  22,  1878, 
illustrates  the  sort  of  anti-foreign  opinions  that  sup- 
ported such  acts.  The  executive  had  made  a  contract 
for  a  road  from  Mexico  to  the  Pacific  and  to  the  fron- 
tier of  the  United  States  in  Texas  or  New  Mexico.  A 
speaker  opposing  the  project  declared: 8 

It  is  very  poor  policy  ...  to  establish  within  our  country  a 
powerful  American  company  ...  we  are  going  to  establish 
within  our  territory  an  American  influence.  .  .  .  Border  na- 
tions are  natural  enemies  .  .  .  without  referring  to  history,  but 
considering  only  contemporaneous  acts,  who  despoiled  France 
.  .  .  ?  The  bordering  nation,  Germany.  Who  is  invading 
Turkey  at  the  present  time?  The  bordering  nation,  Russia. 
.  .  .  What  war  is  there  between  Spain  and  Russia  ?  None.  It  is 
a  natural  law  of  history  that  border  countries  are  enemies.  .  .  -.- 

Hence,  sir,  the  United  States  .  .  .  are  naturally  our  enemy* 
.  .  .  And  will  it  be  prudent  in  this  case  to  place  the  enemy 
within  our  house? 

There  is  also  another  law  in  history;  nations  of  the  North 
necessarily  invade  the  nations  of  the  South.  .  .  .  Unfortu- 

8  Hon.  Alfred  Chavero,  in  ibid.,  1878,  p.  551.  See  also  another 
remarkable  document  in  ibid,,  1879,  p.  828  et  seq. 


TRANSPORTATION  167 

nately,  we  do  not  need  to  recur  to  foreign  histories;  a  rich 
part  of  our  territory  has  become  the  prey  of  the  United  States. 
.  .  .  Hence,  we  should  always  fear  the  United  States. 

We  have  seen  that  a  hundred  leagues  of  railroad  from  here 
to  Vera  Cruz  have  given  such  influence  to  the  English  company 
that  many  times  this  very  influence  has  been  sufficient  to  decide 
the  votes  of  the  chamber,  and  shall  we  be  so  insane  as  to  con- 
sent to  the  establishment  of  an  American  company  which  will 
embrace  the  whole  country  ...  all  our  sections  and  all  our 
roads? 

Would  you  exchange  your  beautiful  and  poor  liberty  of  the 
present  for  the  rich  subjection  which  the  railroad  could  give 
you  ?  Go  and  propose  to  the  lion  of  the  desert  to  exchange  his 
cave  of  rocks  for  a  golden  cage,  and  the  lion  of  the  desert  will 
reply  to  you  with  a  roar  of  liberty. 

The  fears  as  to  the  consequences  of  railway  develop- 
ment were  especially  strong  in  reference  to  the  north- 
western territory  of  the  republic,  but  the  circumstances 
there  could  be  turned  in  favor  of  a  liberal  policy  quite 
as  effectively  as  they  could  be  used  in  opposition.  A 
representative  from  that  region  argued  that  only  by  the 
development  of  the  border  states  could  they  be  saved 
to  Mexico.  Their  growth  would  create  an  equilibrium 
with  the  United  States,  otherwise  "we  exist  in  such  a 
manner  as  causes  us  to  represent  in  the  eyes  of  the  other 
nations  the  role  of  a  sickly,  decrepit  man,  by  the  side  of 
a  hale,  robust  one.  .  .  ."  If  development  is  not  brought 
about  in  these  states  ^"exasperation  will  drive  them 
nearer  our  neighbors  than  anything  alleged  by  those 
who  fear  that  the  influence  ...  of  the  American  union 
may  produce  another  mutilation  of  our  territory.  .  .  . 
It  is  very  dangerous  to  see  just  beyond  a  conventional 


168    MEXICO  AND  ITS  RECONSTRUCTION 

line  prosperity  and  wealth,  and  on  this  side  destitution 
and  poverty.  .  .  ." 

With  the  cooling  off  of  at  least  officially  expressed 
anti-foreign  feeling  and  the  establishment  of  order  the 
foreigners  who  were  interested  in  railway  development 
gradually  weakened  in  their  feeling  that  the  right  of  ap- 
peal to  the  home  government  must  be  recognized  before 
they  could  undertake  projects  in  Mexico.  At  the  same 
time  the  Mexican  Congress  came  to  realize  that  the  ad- 
vantage of  rail  connections  with  the  United  States  over- 
balanced the  attendant  dangers. 

When  Diaz  assumed  control  of  the  government  in 
1876  there  were  666  kilometers  of  railroad  in  the  coun- 
try— the  line  from  Mexico  to  Vera  Cruz — and  proposed 
American  connections,  as  is  indicated  above,  were  un- 
popular. This  prejudice  was  largely  removed  in  the 
first  term  of  the  dictator  and  in  September,  1880,  the 
Mexican  Central  Railroad  and  the  Mexican  National 
Railroad  received  permission  to  build  from  Mexico  City 
lines  to  the  Rio  Grande  border.  Thereafter  the  building 
of  Mexican  railroads  was  carried  on  practically  without 
interruption  to  the  end  of  the  Diaz  regime.  At  its  close 
in  1910  the  666  kilometers  of  railway  running  at  its  be- 
ginning had  increased  to  24,559  kilometers.  There  were 
then  two  lines  instead  of  one  connecting  the  capital  with 
Vera  Cruz.  There  were  two  transcontinental  lines  and 
two  connecting  the  capital  with  the  American  border. 

It  is  hard  to  overestimate  the  benefits  conferred  on 
Mexico  by  the  broader  policy  of  railway  development 

9  Antonio  Morano,  Senator  from  Sonora  in  'ibid.,  p.  831. 


TRANSPORTATION  169 

that  had  its  beginning  in  the  early  '80s.  Along  each 
stretch  of  line  there  grew  up  a  productive  area  con- 
tributing to  national  wealth  and  to  the  strength  and 
stability  of  the  government,  which  had  been  far  sighted 
enough  to  abandon  the  conservatism  and  prejudice  of 
the  former  generation.  Agriculture  flourished  as  never 
before.  Mining  interests  could  market  products  that 
formerly  had  been  valueless  and  for  industries  con- 
ditions were  created  that  made  possible  local  production 
in  many  lines,  in  more  than  household  industries  for  the 
first  time  in  history.10 

The  advantages,  which  the  early  years  indicated,  were 
continued  and  increased  throughout  the  Diaz  regime. 
Heavy  freight  could  now  be  carried  long  distances,  ore, 
lumber,  sisal,  all  the  articles  of  large  bulk  that  enter  into 
Mexican  domestic  and  foreign  commerce  came  to  have 
value  where  they  had  none  before.  The  railroads  were 
one  of  the  important  links  in  the  chain  of  circumstances 
that  made  the  Mexico  of  the  Diaz  regime  a  possibility 
and  seemed  to  guarantee  that  the  republic  had  entered 
at  last  on  a  period  of  peaceful  development  that  would 
not  be  easily  interrupted.  In  international  relations, 
too,  the  railroads  had  had  a  beneficent  influence.  The 
improved  communications  had  turned  a  large  part  of 
Mexican  commerce  in  a  north  and  south  direction.  The 
United  States  had  come  closer  to  the  republic,  not  only 
in  time  but  in  economic  interest  and  in  understanding. 

10  An  excellent  description  of  the  effect  of  the  railways  upon 
Mexican  development  is  found  in  Bernard  Moses,  Railway  Revolu- 
tion in  Mexico,  1Q05.  See  also  Luis  Pombo,  Mexico:  1876-1892, 
Mexico,  1893,  p.  52  et  seq. 


170    MEXICO  AXD  ITS  RECONSTRUCTION 

The  ill  will  of  the  pre-railway  period  had  largely  dis- 
appeared, due  in  no  small  degree  to  the  iron  bonds  that 
drew  the  two  republics  together.  Especially  in  the 
closing  years  of  the  Diaz  regime  friendship  had  replaced 
distrust.  The  new  day,  which  had  come  with  the  rail- 
roads and  had  been  hastened  by  their  construction, 
seemed  to  promise  continued  peace  and  prosperity  for 
the  republic  both  in  its  internal  and  in  its  foreign  re- 
lations. 

Although  the  railroads  built  before  the  end  of  the  Diaz 
regime  did  bring  a  revolution  in  the  conditions  of  traffic, 
they  never  solved  the  transportation  problem.  Large 
areas  were  still  far  from  the  rail  lines  and  the  old  dis- 
advantages of  isolation  still  applied  to  them — often  al- 
most to  as  great  an  extent  as  before  the  railway  era. 
There  was  always  need  of  still  further  railway  extension 
to  open  up  the  resources  of  the  country. 

Moreover,  the  disadvantages  of  the  railless  regions 
were  accentuated  greatly  by  the  lack  of  good  wagon 
roads. 

Spain  did  not  create,  in  her  colonies,  either  well  kept 
trunk  lines  nor  supplemental  highways  of  good  charac- 
ter. In  fact,  even  to  the  present  day  the  home  country 
lacks  them.  The  former  colonies  have  not  created 
them  for  themselves  since  their  winning  of  independence. 
One  of  the  most  important  problems  that  will  confront 
the  Mexican  government  of  the  reconstruction  era  will 
be  to  extend  the  transportation  facilities  of  the  country 
in  a  way  that  will  effectively  unlock  the  resources  now 
held  embargoed  by  their  lack. 

Unfortunately  the  developments  during  the  revolu- 


TRANSPORTATION  171 

tionary  years  have  not  been  such  that  will  let  the  govern- 
ments of  the  new  Mexico  begin  where  the  Diaz  regime 
left  off  in  the  construction  of  means  of  communication. 
Transportation  routes,  one  of  the  first  objects  of  care 
among  modern  nations  in  times  of  peace,  are  often 
among  the  first  to  be  neglected  in  time  of  war.  Roads 
do  not  become  impassable  with  temporary  neglect  and 
railroads  can  run  for  a  time  with  a  small  expenditure  on 
repairs.  In  the  area  of  military  operations  they  are 
carefully  protected  or  ruthlessly  destroyed  according  to 
what  the  contestants  think  will  contribute  to  their 
advantage.  The  temptation  for  both  parties  in  a  civil 
war  is  to  let  them  deteriorate  where  they  do  not  directly 
contribute  to  the  fortunes  of  war. 

The  history  of  the  16,000  miles  of  railroads  during 
the  decade  of  revolution  in  Mexico  has  been  tragic  for 
their  owners  and  fantastic  for  those  whom  they  served. 
The  instrument  that  did  so  much  to  bring  peace  and 
order  was  made  a  means  by  which  first  one  side  and  then 
the  other  was  able  to  carry  on  operations  against  its  op- 
ponents more  successfully  than  otherwise  would  have 
been  possible.  Only  illustrations  of  the  sorts  of  condi- 
tions that  arose  can  here  be  given. 

The  physical  ruin  of  the  roads  is  all  but  complete.  A 
series  of  governments,  each  fighting  with  back  to  the 
wall,  has  had  no  resources  with  which  to  keep  up  re- 
pairs. The  income  of  the  roads  themselves  has  suffered 
diminution  because  of  falling  traffic  and  the  violent  fluc- 
tuations of  the  value  of  the  paper  money  in  which  serv- 
ices were  paid.  The  extent  of  the  demoralization  of  the 
service  is  illustrated  by  the  report  of  the  National  Rail- 


172    MEXICO  AND  ITS  RECONSTRUCTION 

ways  of  Mexico  for  1916.11  The  president  reported  no 
receipts  from  operation  and  a  debit  of  21,870,213.02 
silver  pesos  for  the  year.  The  debit  since  the  beginning 
of  the  revolution  was  almost  80,000,000  silver  pesos. 
The  nominal  reported  receipts  were  extraordinarily  high 
in  some  periods  but  they  did  not  appear  to  reach  the 
treasury  and,  even  if  they  had  done  so,  their  real  value 
was  but  a  fraction  of  their  face,  since  they  were  in  the 
Vera  Cruz  issue,  which  was  worth  14  or  15  cents  gold 
in  January,  1915,  but  later  fell  rapidly  to  two  cents  and 
and  then  so  low  that  it  refused  to  circulate. 

The  rolling  stock  gradually  disappeared  from  active 
use.  The  military  chiefs  confiscated  it  to  military  uses 
in  transporting  troops  or  as  spoils  of  war,  if  it  was  cap- 
tured while  in  possession  of  the  enemy.  The  various  so- 
called  generals  used  the  cars  "as  barracks  and  perma- 
nent dwellings  for  the  soldiers  and  their  families,  and 
frequently  for  freight  transportation  within  their  juris- 
diction for  personal  profit." 

The  railway  employees,  or  at  least  those  in  authority 
over  divisions  that  were  still  in  operation,  seized  the  op- 
portunity to  create  a  system  of  graft  seldom,  if  ever, 
equaled.  It  is  true  they  are  hardly  to  be  blamed,  for 
they  could  not  live  on  the  salaries  the  government  paid 
to  them  in  its  own  depreciated  currency.  Government 
officials  in  the  railway  administration  shared  the  illegiti- 
mate returns  directly  or  indirectly.  The  few  cars  avail- 
able were  eagerly  sought  by  those  whom  rashness  or 

11  Eighth  Annual  Report  of  the  National  Railways  of  Mexico, 
June  SO,  1916,  pp.  16-19,  signed  by  Alberto  J.  Pani,  who  was  presi- 
dent of  the  Railway  and  Minister  of  Railways  at  the  same  tune. 


TRANSPORTATION  173 

necessity  forced  to  keep  shipping  goods  under  the  pre- 
vailing uncertain  conditions.  No  cars  were  forthcom- 
ing without  liberal  gratifications.  In  short,  the  revolu- 
tion brought  to  the  railways,  in  the  regions  it  affected, 
first  neglect  and  then  anarchy. 

Unfortunately  for  Mexico  it  must  face,  during  the 
reconstruction  period,  the  necessity  of  repairing  the  sys- 
tem of  communication,  which  was  thus  destroyed.  It  is 
a  disadvantage  not  measured  by  the  damages  that  must 
be  paid  to  those  whose  property  disappeared  or  depre- 
ciated in  value  because  of  the  use  to  which  it  was  put 
during  the  conflict.  Perhaps  even  more  serious  will  be 
the  losses  that  the  people  of  Mexico  as  a  whole  must  suf- 
fer through  the  inefficient  service,  which  is  all  that  can 
be  furnished  during  the  period  when  the  roads  will  oper- 
ate with  poor  and  insufficient  equipment.  To  destroy 
the  railroad  system  of  a  country  is  not  only  to  destroy 
the  property  it  directly  represents  but  also  to  reduce  the 
value  of  the  property  of  the  country  that  the  railroad 
serves.12 

The  recent  governments  in  Mexico  have  recognized 
that  the  reestablishment  of  communications  is  one  of  the 
first  essentials  for  the  economic  revival  of  the  country. 
The  roadbed  of  the  railroads  suffered  less  during  the 
revolution  than  the  rolling  stock.  Bridges  burned  or 
blown  up  in  the  area  of  military  operations  first  re- 
ceived the  attention  of  the  government  but  many  have 

12  Descriptions  of  the  conditions  on  the  railways  brought  about 
by  the  revolution,  and  of  the  plans  of  the  Carranza  government  for 
improving  the  railway  net  are  found  in  Railway  Age,  vol.  66,  pp. 
1531-4  and  1549. 


174    MEXICO  AND  ITS  RECONSTRUCTION 

even  now  been  given  only  temporary  repair.  Mexican 
railroads  lost  about  10,000  freight  cars  and  400  locomo- 
tives during  the  revolution.  Large  numbers  of  freight 
cars  were  burned  or  wrecked  and,  in  order  to  encourage 
getting  those  that  could  be  repaired  back  into  use  at  an 
early  date,  a  plan  was  adopted  through  which  any  con- 
cern might  reconstruct  cars  at  its  own  expense,  receiv- 
ing in  return  the  right  to  control  them  for  its  own  use 
for  a  period  usually  of  one  to  two  years.18  American 
railroad  lines  allowed  their  freight  cars  to  go  into  Mex- 
ico when  bonds  were  given  for  their  safe  return.  On 
October  15,  1920,  the  Pullman  Company  began  letting 
its  cars  enter  the  country  without  this  restriction.14  An 
arrangement  made  with  the  American  Railway  Asso- 
ciation on  January  1,  1920,  allowed  a  large  number  of 
freight  cars  to  be  taken  across  the  border  and  the  Mex- 
ican government  announced  its  desire  to  set  aside  $30,- 
000,000  Mexican  to  purchase  additional  rolling  stock.15 
On  June  1,  1921,  President  Obregon  appointed  a  per- 
sonal representative  to  introduce  improvements  in  the 
handling  of  traffic.16  Though  congestion  of  freight  at 
the  ports  still  continued  to  be  a  serious  problem,  at  least 
the  first  steps  had  been  undertaken  toward  reestablish- 
ment  of  that  standard  of  communications  reached  at  the 
end  of  the  Diaz  regime. 

18  W.  H.  Moseley  Jr.,  "Mexico  To-day"  (pamphlet),  New  York, 
November,  1920. 

14  Railway  Age,  January  7,  1921,  p.  113. 

15  Commerce  Reports,  February  18,  1921,  p.  993. 

16  Commerce  Reports,  June  21,  1921,  p.  1650. 


CHAPTER  XIV 

INDUSTRY  AND  INTERNAL  COMMERCE 

INTERNAL  industrial  development  was  practically 
non-existent  in  Mexico  before  the  Spanish  conquest  and 
remained  negligible  throughout  the  colonial  period.  In- 
dian industry  for  the  supply  of  local  wants  continued 
throughout  the  country  districts.  The  civilization  was 
static  both  socially  and  geographically.  In  the  towns, 
it  is  true,  some  articles  of  European  manufacture  were 
introduced  but  they  were  only  those  that  could  bear 
high  carrying  costs.  They  did  not  displace  native  manu- 
factures because  they  reached  only  those  of  European 
blood,  nor  did  their  high  price,  as  a  rule,  give  rise  to 
local  manufacture. 

The  typical  Mexican  manufactured  products  that 
found  their  way  into  European  trade,  if  the  simple 
process  by  which  they  were  produced  can  be  dignified  by 
the  name  of  manufacture,  were  the  precious  metals, 
cochineal,  indigo,  and  sugar.  Because  of  the  exclusion 
of  foreigners,  the  commercial  and  industrial  develop- 
ment, so  far  as  it  was  not  in  the  hands  of  the  native 
races,  was  monopolized  by  Spaniards. 

One  of  the  first  industries  established — a  reflection  of 
the  development  the  Spaniards  emphasized  in  the  coun- 
try— was  the  coining  of  silver,  which  was  begun  at  the 
Mexico  mint,  established  in  1537.  Toward  the  end  of 
the  colonial  period  a  beginning  of  textile  manufacture 

175 


176    MEXICO  AND  ITS  RECONSTRUCTION 

did  occur,  the  chief  centers  of  which  were  Queretaro, 
San  Miguel  el  Grande,  Puebla,  and  the  Intendanz  Gua- 
dalajara. The  latter  two  were  credited  with  a  produc- 
tion of  cotton  goods  valued  at  over  3,000,000  pesos  *  in 
1802.  The  industry  was  in  the  hands  of  small  spinners 
and  weavers.  Queretaro  produced  both  cotton  and 
woolen  goods.  There  were  a  few  silk  weaving  estab- 
lishments, this  industry  having  been  introduced  by  a 
Frenchman.8  A  few  printing  establishments  and  glass 
and  fayence  factories  built  up  a  small  trade. 

The  developments  in  industry  in  the  outside  world 
during  the  nineteenth  century  had  a  greater  effect  on 
Mexico  than  in  the  preceding  period.  Some  Mexican 
industries  were  killed.  Cochineal  and  indigo  lost  their 
place  in  trade.  New  lines  appeared,  lines  that  had  a 
more  direct  connection  with  the  modern  conditions, 
which,  little  by  little,  were  coming  to  affect  the  life  of 
the  republic.  The  first  quarter-century  following  in- 
dependence was  so  disturbed  that  no  important  develop- 
ment of  industry  occurred  and  no  statistics  are  avail- 
able giving  a  survey  of  the  efforts  made  in  small  estab- 
lishments. 

Some  factors  of  Mexican  life  favored  industrial  de- 
velopment in  the  last  half  of  the  nineteenth  century.  In 
the  industries  in  which  native  labor  could  be  used  to 
advantage  the  low  labor  cost  encouraged  investment. 
The  low  exchange  rate  of  silver  raised  the  price  of  im- 
ported articles  and  thus  favored  local  enterprise.  Fur- 

1Karl  Sapper.     Wirtschaftsgeographie  von  Mexico,  1908,  p.  25. 
2  Maurice  de  Perigny,  Les  Etats  Unis  du  Mexique,  Paris, 
p.  101,  and  Sapper,  op.  cit.,  pp.  25-30. 


INDUSTRY  AND  COMMERCE         177 

ther,  the  government  sought  to  help  industry  as  it  did 
agriculture  by  creating  artificial  advantages  for  local 
enterprise,  not  only  in  a  protective  tariff  but,  after  1893, 
by  special  exemptions.  In  that  year  the  executive  was 
empowered  to  give  special  privileges  to  those  setting  up 
new  industries  in  the  country  if  their  investment 
amounted  to  250,000  pesos.  These  privileges  might  in- 
clude freedom  from  direct  federal  taxes  and  freedom 
from  customs  taxes  on  the  machinery  and  other  ma- 
terials of  construction  necessary  for  setting  up  the  es- 
tablishment.3 The  states  adopted  a  similar  policy  to  at- 
tract industry  to  their  own  territories. 

The  textile  industry  is  the  best  known  of  Mexican 
manufacturing  developments  and  the  one  in  which  the 
Mexican  population  has  had  its  best  opportunity  to  dis- 
play its  abilities.  Cotton  weaving  is  naturally  its  most 
important  branch.  The  first  cotton  mill  is  said  to  have 
been  set  up  as  early  as  1829.  The  credit  for  giving 
the  industry  its  first  genuine  impulse,  however,  appears 
to  belong  to  Esteban  Antunano,  who  set  up  his  first  es- 
tablishment in  Puebla  in  1833. 

Advance  sufficient  to  justify  extensive  export  has 
not  been  made,  in  fact,  there  is  still,  in  normal  times,  an 
important  import  trade  in  textiles.  The  grades  of 
goods  chiefly  produced  are  medium  priced  cottons,  such 
as  meet  a  wide  demand  among  the  common  people. 
Fine  cotton  goods,  however,  are  woven  and  in  their 
making  the  native  has  shown  himself  of  decided  capacity. 

In  this  industry,  as  in  all  others  established  in  Mexico, 

8  Maurice  de  Perigny,  op.  cit.,  p.  100. 


178    MEXICO  AND  ITS  RECONSTRUCTION 

the  period  of  rapid  development  began  with  the  early 
'90s.  At  the  outbreak  of  the  revolution  there  were  324 
factories  reported  as  manufacturing  cotton  and  wool 
textiles.  The  most  important  of  the  cotton  mills  were 
those  of  the  Compania  Industrial  de  Orizaba,  operating 
the  famous  Rio  Blanco  mill,  founded  in  1892,  and  others 
at  Cocolapan,  San  Lorenzo,  and  Cerritos;  that  of  the 
Compania  Industrial  Veracruzana,  founded  in  1898, 
known  as  the  Santa  Rosa  mill,  at  Orizaba;  that  of  the 
Compania  Industrial  de  Atlixco,  near  Atlixco,  and  those 
of  the  Compania  Industrial  de  San  Antonio  Abad,  in 
San  Antonio  Abad,  Miraflores,  and  Colemena.  The 
capital  in  these  companies  is  predominantly  French. 

The  most  important  woolen  mill  was  the  Fabrica  de 
Tejidos  de  Lana  de  San  Idelfonso  in  Tlalnepantla. 
The  most  important  jute  factories  are  the  British  owned 
Santa  Gertrudis  in  Orizaba,  and  the  Aurora  in  Cuatit- 
lan  in  the  State  of  Mexico.* 

Factories  producing  sugar,  candy,  and  chocolate  num- 
bered over  2,196  in  1912.  Most  of  them  were  small. 
Hidalgo  led  the  list  in  number  of  establishments  with 
over  a  fifth  of  the  total.  The  other  states  that  ranked 
high  were  in  order  Jalisco,  Nuevo  Leon,  Vera  Cruz, 
Oaxaca,  and  Puebla.6 

Though  Mexico  has  a  comparatively  high  production 
of  sugar,  export  has  not  yet  come  to  be  important.  A 
very  important  by-product  of  the  sugar  factories  of 
Mexico  is  rum,  which  is  also  chiefly  manufactured  for 

*  Erich  Gunther,  Handbuch  von  Mexico,  Leipzig,  1Q12,  p.  181. 
6  Statistics  in  Erich  Gunther,  op  cit.,  p.  184. 


INDUSTRY  AND  COMMERCE         179 

the  local  market.  After  the  sugar  industry  the  produc- 
tion of  brandy  is  the  most  widespread  industry  of  Mex- 
ico. There  were  1,417  factories  reported  before  the 
revolution,  depending  chiefly  upon  sugar  cane  and  corn 
as  raw  materials.  About  40  breweries  were  in  opera- 
tion and  they  were,  with  few  exceptions,  in  German 
hands.6 

Tobacco  manufacture  has  become  one  of  the  wide- 
spread industries  of  Mexico.  There  were  482  factories 
in  operation  at  the  outbreak  of  the  revolution.  The 
greatest  number  were  found  in  the  cities  of  the  central 
plateau  and  in  the  Gulf  coast  states  of  Vera  Cruz  and 
Tamaulipas.  The  states  of  the  southeast  and  most  of 
those  of  the  northern  belt  were  poorly  represented.7 

Electrical  power  development  is  limited  in  Mexico 
because  of  the  torrential  character  of  most  of  the  rivers, 
the  uneven  flow  of  which  makes  the  power  actually 
available  very  irregular.  Nevertheless,  there  are  a 
number  of  power  plants  of  importance,  among  which 
are  that  on  the  Rio  Blanco  owned  by  S.  Pearson  and 
Son,  a  British  interest  controlling  also  an  electric  light 
and  power  company  in  Vera  Cruz,  which  operates  water 
rights  on  the  Rio  Antiguo  and  the  Rio  Octopan.  The 
Atoyac  Irrigation  Company  is  a  hydraulic  electric  com- 
pany with  rights  on  the  Atoyac  River,  which  uses  the 
spent  waters  for  irrigation.  At  the  outbreak  of  the 
revolution  it  was  controlled  by  a  Puebla  company, 
which  also  had  concessions  on  the  Portezuelo  and  the 

6  Ibid.,  p.  185. 

7  Statistics  of  the  location  of  factories  are  published  in  ibid., 
p.  183. 


180    MEXICO  AND  ITS  RECONSTRUCTION 

Rio  Blanco.  The  power  rights  at  Nexaca  Falls  are 
owned  by  the  Mexican  Light  and  Power  Company,  a 
British  interest.8 

The  development  of  industry  has  been  hindered  in 
Mexico,  as  it  is  in  many  other  countries,  by  lack  of  a 
good  supply  of  coal.  What  industrial  development  has 
occurred  has  had  to  depend  largely  on  the  great  forests 
of  the  country  for  fuel.  As  those  lying  within  easy 
reach  of  the  railroads  have  been  exhausted,  the  price  of 
wood  has  naturally  risen  and  efforts  to  obtain  substi- 
tutes have  been  increased.  Imported  coal  continues  to 
be  expensive.  Some  advance  has  been  made  in  the  util- 
ization of  water  power,  especially  in  the  textile  indus- 
tries but  the  country's  rivers  are  not  of  sufficiently 
steady  flow  to  make  reliance  on  that  resource  satisfac- 
tory. Fortunately,  the  development  of  the  oil  regions 
along  the  Gulf  coast  has  now  placed  Mexico  in  a  favor- 
able position,  so  far  as  the  fuel  requirements  of  her  in- 
dustries are  concerned,  a  factor  in  which  the  republic 
is  now  as  favored  as  it  was  formerly  unfortunate. 

Indirectly,  the  progress  of  the  local  industrial  de- 
velopment is  reflected  in  the  foreign  trade  returns  of 
the  two  decades  preceding  the  revolution.  Imports  of 
manufactures  ready  for  consumption  increased  but 
little.  The  total  value,  for  example,  of  such  articles  as 
cloth,  chemicals,  liquors,  paper,  vehicles,  arms,  and  ex- 
plosives was  $17,157,000  in  1896.  In  1906  it  had  risen 
to  $25,982,000,  but,  while  the  first  figure  was  40  per  cent 
of  the  total,  the  latter  was  but  24  per  cent.  In  the  same 

*Ibid.,  p.  179. 


INDUSTRY  AND  COMMERCE         181 

period,  machinery  imports  doubled,  animal  products  in- 
creased 170  per  cent,  vegetable  products  133  per  cent, 
and  mineral  products — including  fuel  and  metals — more 
than  fourfold.  Apparently  the  growing  industry  of 
Mexico  was  already  enabling  it  to  supply  itself  with 
the  cheaper  articles  of  local  consumption  and  at  the 
same  time  increasing  the  demands  for  food,  machinery, 
and  raw  materials.9 

Turning  from  manufacture  to  internal  trade,  we  find 
that  in  the  country  at  large  during  the  colonial  period 
commerce  went  on  in  much  the  same  channels  as  before 
the  coming  of  the  white  man.  The  Indians  manufac- 
tured their  simple  home-industry  wares  for  local  con- 
sumption and,  to  a  lesser  degree,  for  the  trade  of  the 
city,  where  they  were  sold  for  the  articles  that  each  com- 
munity did  not  produce  for  itself.  The  white  popula- 
tion in  the  cities  gradually  came  to  act  as  middlemen  for 
the  local,  as  well  as  for  the  foreign  trade.10  Supple- 
menting the  regular  local  markets  there  were  occasional 
fairs,  notably  at  Jalapa,  held  chiefly  for  the  goods  com- 
ing from  Europe  and,  at  various  times,  at  Acapulco, 
San  Bias,  and  Mexico  for  the  goods  brought  back  from 
the  Far  East  in  the  irregular  trade  of  the  Manila  gal- 
leons. 

Foreign  merchants  made  their  way  but  slowly  into 
Mexico,  even  after  the  winning  of  the  independence  of 
the  republic.  By  1850  there  were  a  number  of  French 
retail  houses  established  in  the  larger  towns  of  Mexico, 
especially  in  the  dry  goods  business.  The  rest  of  the 

9  Commercial  America  in  1907,  Washington,  1909>  p.  43. 

10  Karl  Sapper,  op  cit.,  1908,  p.  30. 


182    MEXICO  AND  ITS  RECONSTRUCTION 

jobbing  and  retail  business  in  that  line  was  still  con- 
trolled by  Spaniards  and  Mexicans.  There  were  three 
French  banking  and  commercial  houses,  and  two  whole- 
sale houses.  Eight  German,  and  three  English  whole- 
sale houses  also  had  established  themselves.11 

In  the  interior  towns,  even  after  the  middle  of  the 
century,  there  were  still  few  foreign  houses.  Strangers 
were  suspected,  especially  if  they  had  money  and  the  in- 
security of  the  country  made  even  capital  that  was  ven- 
turous enough  to  go  to  the  larger  centers  unwilling  to 
take  the  risks  of  carrying  stocks  elsewhere. 

It  was  not  until  after  1870  that  marked  increase  of 
activity  in  internal  trade  began  to  be  shown.  At  that 
time  the  British  and  Germans  had  in  their  hands  all  the 
wholesale  trade  and  the  manufacture  of  wool  and  cot- 
ton in  which  the  French  were  later  to  play  a  prominent 
part.  A  curious  development  has  occurred  in  this  line 
in  Mexico.  After  the  opening  of  the  country,  at  the  end 
of  the  Spanish  regime,  the  British  came  to  control  it,  but 
were  forced  to  share  it  with  the  Germans.  The  latter 
practically  replaced  the  British  but  were  in  turn  them- 
selves displaced  by  the  French.  The  Germans  and 
British  also  controlled  the  sale  of  silks,  iron  and  steel, 
and  jewelry.  The  Spaniards  had  the  wholesale  and  re- 
tail trade  in  liquors  and  groceries,  lines  in  which  they 
have  continued  to  figure  prominently.12 

11  M.  P.  Arnaud,  L' Emigration  et  le  commerce  francais  au  Mex- 
ique,  Paris,  1Q02,  p.  54.     This  work  and  Maurice  de  Perigny,  op. 
cit.,  give  excellent  accounts  of  the  French  influence  on  the  economic 
development  of  Mexico. 

12  Arnaud,  op.  cit.,  p.  65,  and  House  of  Representatives,  Docu- 


INDUSTRY  AND  COMMERCE         183 

Foreigners  have  continued  to  be  a  prominent  factor 
in  the  commercial  life  of  the  republic  and  each  group 
has  shown  a  tendency  to  control  certain  lines  of  business. 
At  the  end  of  the  Diaz  regime  the  French  continued  to 
be  prominent  in  the  dry  goods  and  clothing  trade  and 
had  "practically  monopolized"  the  sale  of  notions.  Bet- 
ter class  bakeries,  fine  jewelry  stores,  tailoring  estab- 
lishments and  a  part  of  the  grocery  stores  were  owned 
by  them.  The  employees  of  these  establishments  were 
also  largely  French.13  Americans  came  to  control  the 
trade  in  machinery  and  machinery  supplies.  Germans 
were  prominent  in  the  hardware  business — much  more 
prominent  in  disposing  of  the  goods  than  the  proportion 
of  German  manufactured  hardware  imported  indicates. 
British  commerce  showed  less  tendency  to  confine  itself 
to  special  lines. 

It  is  easy  to  overemphasize  the  degree  to  which  indus- 
try and  modern  commercial  methods  have  found  their 
way  into  Mexico  and  this  is  often  done  by  those  who 
know  only  the  Mexico  of  the  large  towns  and  of  the 
strips  of  territory  that  are  within  range  of  the  whistle  of 
the  railway  locomotive.  Outside  of  these  areas  the  Mex- 
ico of  to-day  retains,  to  a  degree  hard  for  the  American 
or  European  to  realize,  the  conditions  of  a  generation 
ago  and  in  many  districts  almost  the  conditions  of  the 
time  of  the  conquest.14 

A   prominent   characteristic   of   Mexican   commerce 

ment  145,  part  5,  58th  Congress,  3d  Session,  "International  Bureau 
of  American  Republics,"  Mexico,  p.  68. 

13  M.  P.  Arnaud,  op  cit. 

14  Karl  Sapper,  op.  cit.,  p.  37. 


184    MEXICO  AND  ITS  RECONSTRUCTION 

continues  to  be  the  degree  to  which  the  capital  is  its  cen- 
ter, in  spite  of  the  facilities  introduced  by  the  railroads 
for  its  decentralization.  Mexico  City,  the  metropolis  of 
the  country,  by  a  wide  margin  is  the  center  of  Mexican 
commerce  to  an  even  greater  degree  than  Paris  is  the 
center  of  French  trade.  The  railroads  that  converge  at 
the  capital  have  helped  to  continue  the  habit  of  the  pro- 
vincial commercial  interests  to  look  upon  it  as  the  source 
of  supply.  In  it  are  the  chief  banks  and  from  it  much 
of  the  industrial  activity  is  directed.15 

The  harm  done  to  industry  in  Mexico  during  the 
years  of  the  revolution  is  much  smaller  than  it  would 
have  been  had  the  country  had  greater  development  of 
local  manufactures.  Agriculture,  the  chief  industry  of 
the  republic,  suffered  severely.  In  some  states,  like 
Vera  Cruz,  the  farming  population  flocked  into  the 
towns.  As  a  result  the  sugar  crop  of  the  state  fell  from 
170,000  tons  in  1911  to  40,000  tons  in  1917-18.  The 
Cordoba  coffee  crop  dropped  off  in  the  same  period  from 
50,000,000  pounds  to  20,000,000.  In  other  areas  the 
people,  though  they  stayed  on  the  land,  did  not  plant 
crops  which  they  felt  no  assurance  they  would  be  al- 
lowed to  harvest  and  market.  The  cattle  industry  of 
the  northern  states  steadily  declined.  That  in  Chihua- 
hua was  reported  in  1918  to  be  only  about  five  per  cent 
as  important  as  before  the  revolution.  In  other  states 
legislation  for  dividing  up  the  large  estates  threatened 
to  make  stock  raising  impossible. 

The  effect  of  the  revolution  on  some  of  the  manufac- 

16  House  of  Representatives,  op.  cit.,  p. 


INDUSTRY  AND  COMMERCE         185 

hiring  industries  is  hard  to  estimate.  Tobacco  manu- 
facture appears  to  have  flourished.  The  textile  mills, 
though  they  were  hampered  by  the  secondary  results  of 
the  revolution:  sabotage,  strikes,  high  taxes,  and  im- 
practical labor  legislation,  continued  to  operate  at  a  sat- 
isfactory rate  during  at  least  a  portion  of  the  revolu- 
tionary period. 

Mining,  taken  as  a  whole,  did  not  prosper.  The 
northern  states  were  one  of  the  favorite  battlegrounds 
of  the  revolutionists  and  only  properties  near  the  rail- 
roads or  large  towns  could  be  operated  with  any  degree 
of  security.  The  Chihuahua  smelters  were  closed  down 
for  the  two  years  ending  April,  1918,  and  other  mining 
operations  were  at  a  low  ebb. 

The  worst  industrial  conditions  seem  to  have  been 
passed  by  1918.  From  that  time  on  the  agricultural 
population  has  been  less  disturbed  by  bandits  and  the 
farmers  were  reported  in  1920  to  have  gone  back  to 
work  except  in  remote  districts  and  certain  sections  of 
Puebla,  Chihuahua,  and  Durango. 

The  rapid  rise  in  the  value  of  silver  in  the  latter  part 
of  1919  encouraged  extending  that  branch  of  mining 
and  the  output  of  other  metal  and  mineral  products  was 
increased  under  the  stimulus  of  the  business  boom  fol- 
lowing the  declaration  of  peace  in  Europe.18 

The  effect  of  the  revolution  on  mercantile  operations 
was  to  induce  the  sacrifice  of  stocks  in  regions  threat- 
ened by  disturbance.  Those  supplies  that  were  left 
when  the  roving  military  forces  came  were  often  con- 

16  Supplement  to  Commerce  Reports,  June  21,  1921. 


186    MEXICO  AND  ITS  RECONSTRUCTION 

fiscated  outright  or  paid  for  by  warrants  issued  by  the 
commanding  officers.  Once  the  stocks  were  gone  their 
former  owners  replaced  them,  if  at  all,  only  by  buying 
for  minimum  current  requirements.  The  paper  money 
issues  also  demoralized  mercantile  accounts  and  the 
stories  of  the  experiences  of  some  of  those  who  found 
themselves  forced  to  accept  worthless  paper  for  goods 
they  had  purchased  on  a  gold  basis  are  among  the  most 
extraordinary  which  the  revolution  produced. 

In  mercantile  as  in  industrial  activities  a  gradual  im- 
provement from  1918  on  has  occurred  with  the  re-adop- 
tion of  the  gold  standard  and  establishment  of  com- 
parative order  by  governments  whose  control  is  ac- 
cepted or  acquiesced  in  by  the  war-weary  population. 


CHAPTER  XV 

THE  FOREIGN  COMMERCE  OF  MEXICO: 
BEFORE  DIAZ 

COMMERCE  is  the  lifeblood  of  governments.  With- 
out it  public  revenues  and  public  works  are  impossible. 
Through  all  of  Mexico's  history  as  a  colony  and  through 
much  of  her  independent  existence  this  truism  was  not 
appreciated.  Through  practically  the  entire  colonial 
period  the  mother  country  sought  to  stifle  the  economic 
development  of  the  great  region  to  which  it  had  given 
its  name,  or  at  least  to  confine  it  to  such  narrow,  pre- 
scribed channels  that  no  commerce  could  develop  pro- 
portionate to  the  great  latent  possibilities  of  the  ter- 
ritory. 

The  first  half-century  of  independence  brought  little 
improvement,  for  though  the  policy  of  throwing  the 
country  open  to  world  commerce  was  adopted,  its  do- 
mestic troubles  and  the  disasters  of  its  foreign  relations 
shut  off  the  development  that  might  have  occurred. 
Foreign  capital  was  unwilling  to  trust  itself  in  the  midst 
of  the  revolutionary  storms,  and  domestic  enterprise 
did  not  have  a  chance  to  show  its  abilities. 

A  consideration  of  the  unfortunate  commercial  con- 
ditions, which  prevailed  before  the  Diaz  regime,  is  nec- 
essary for  an  understanding  of  the  present-day  economic 
problems  that  confront  the  republic.  They  indicate  the 
difficulties  that  faced  the  new  government  in  its  efforts 

187 


188    MEXICO  AND  ITS  RECONSTRUCTION 

to  shake  itself  free  from  the  past,  and  they  show  the 
origin  of  many  of  the  limitations  under  which  commerce 
continues  even  to  the  present  day. 

Like  other  colonizing  nations  of  the  age  of  discovery, 
Spain  sought  to  keep  for  herself  all  the  advantages  of 
her  new  possessions.  To  do  so,  she  shut  out  all  but 
Spaniards,  and  even  trade  with  Spain  was  allowed  only 
under  strict  regulation.  Seville  and  Cadiz  were  made 
the  only  ports  of  entry  in  the  home  country,  and  only 
through  Vera  Cruz  could  the  commerce  pass  into  Mex- 
ico. This  system  of  control  lasted,  with  few  exceptions, 
for  about  two  and  a  half  centuries.  There  were  viola- 
tions by  large  numbers  of  smugglers,  but  in  theory  there 
was  but  one  recognized  door  through  which  the  regular 
trade  of  Mexico  could  pass.1  Boats  first  went  out  sin- 
gly, but  later,  for  mutual  protection  against  pirates  and 
to  avoid  frauds  in  the  revenue,  they  were  required  to 
sail  in  fleets.  Not  until  the  so-called  ordinance  of  free 
commerce  issued  by  Carlos  III  on  October  12,  1778,  did 
the  old  system  nominally  come  to  an  end. 

Concerning  the  character  and  value  of  this  early  trade 
there  are  no  satisfactory  data.  For  the  first  50  years 
little  more  than  an  average  of  one  boat  a  year  went  to 
Mexico,  taking  a  cargo  largely  made  up  of  supplies  and 
armament  and  returning  with  native  products  about  the 
character  of  which  there  is  little  available  information. 
For  the  two  centuries  preceding  1778  the  records  are 
almost  equally  unsatisfactory.  There  appears  to  have 
been  a  steady  rise  in  the  tonnage  of  the  fleets  sent  in  the 

1  Miguel  Lerdo  de  Tej  ada,  Comercio  esterlor  de  Mexico  desde  la 
conquista  Tiasta  hoy,  Mexico,  1853,  p.  8. 


EARLY  FOREIGN  COMMERCE       189 

last  70  years,  which  probably  reflects  a  rise  in  the  value 
of  the  commerce.  Precious  metal  shipments  from  Mex- 
ico increased.  There  are  lists  of  the  goods  carried  by 
some  of  the  later  fleets.  The  last  fleet  under  the  old 
monopoly  system,  which  arrived  in  1776  and  returned 
in  1778,  carried  to  Mexico  a  cargo  in  which  the  chief 
elements  were  quicksilver,  iron,  and  iron  manufactures. 
The  exports  from  Mexico  in  this  year  were — first  of  all 
— silver,  to  the  amount  of  over  1,680,000  pesos  on  the 
king's  account  and  9,800,000  pesos  for  individuals. 
There  were  sent  232  tons  of  copper  and  some  gold,  tin, 
sulphur,  red  ochre,  indigo,  wood,  cotton,  wool,  and  hides. 
Two  and  a  half  centuries  of  Spanish  rule  had  developed 
in  Mexico  only  one  important  resource — metals — among 
which  silver,  which  has  been  even  up  to  our  own  day 
the  connotation  of  Mexican  commerce,  easily  held  first 
rank.  Other  raw  materials  played  an  unimportant  part, 
and  local  manufactures  then,  as  in  all  the  previous  his- 
tory of  the  country,  were  conspicuous  by  their  absence. 
The  legal  position  of  Mexican  commerce  in  the  clos- 
ing years  of  the  colonial  period  was  much  more  favor- 
able than  before.  To  be  sure,  free  commerce  did  not 
mean  what  the  words  mean  to  us,  but  the  trade  was 
opened  during  these  years  to  more  than  a  dozen  cities 
of  Spain ;  Vera  Cruz  ceased  to  be  the  only  port  of  entry ; 
and  the  restrictions  on  coastwise  trade  were  relaxed. 
Trade,  however,  followed  much  in  the  old  channels.  Lo- 
cal society  had  not  been  leavened  by  the  conquerors.  The 
coastwise  trade  did  not  develop ;  trade  with  the  world  at 
large  was  not  yet  free;  and  Vera  Cruz,  that  "unwhole- 
some town"  with  its  "disagreeable  anchorage  among 


190    MEXICO  AND  ITS  RECONSTRUCTION 

shallows"  continued  to  be  the  port  at  which  all  but  a 
small  part  of  the  foreign  commerce  entered  and  from 
which  the  exports  of  chief  value  were  shipped.2 

One  other  branch  of  Mexican  trade  in  the  colonial  era 
deserves  mention — the  commerce  with  Asia,  which  the 
mother  country  always  looked  upon  with  jealousy  but 
which  it  felt  it  necessary  to  allow  in  spite  of  the  fact  that 
it  drained  off  part  of  the  highly  valued  silver  produc- 
tion of  Mexico  and  brought  back  from  the  East  textiles 
that  competed  with  her  own  manufactures.  This  was 
the  trade  through  the  galleons,  which  sailed  usually  from 
/  Acapulco  for  the  assistance  of  the  unprosperous  colony 
in  the  Philippines.  The  Spanish  merchants  always 
looked  upon  this  commerce  as  an  unavoidable  evil  at 
best.  In  1593  a  royal  decree  confined  the  trade  to  two 
ships  a  year,  in  which  not  more  than  500,000  duros  of 
silver  could  be  sent  in  return  for  the  Chinese  goods  which 
they  brought  to  Mexico.  Except  as  to  the  number  of 
ships,  the  government's  regulations  of  this  trade  were 
always  observed  in  the  breach.  The  officials  in  Manila 
and  in  Mexico  lent  themselves  to  all  sorts  of  evasions. 
Shipments  of  as  much  as  4,000,000  pesos  in  a  single  year 
are  reported  to  have  gone  to  the  Philippines. 

After  the  middle  of  the  eighteenth  century  the  restric- 

2  For  discussions  of  the  commerce  of  this  period  see:  Alexandra 
de  Humboldt,  Political  Essay  on  the  Kingdom  of  New  Spain,  Lon- 
don, 1814,  2d  ed.,  vol.  1,  p.  cxvii,  and  vol.  3,  p.  492;  Chappe  D'Au- 
teroch,  Voyage  to  California,  London,  1778,  pp.  20-1 ;  Henry  Ker, 
Travels  Through  the  Western  Interior  of  the  United  States  from 
the  Year  1803  up  to  the  Year  1816;  with  a  particular  description 
of  a  great  part  of  Mexico,  or  New  Spain,  Elizabethtown,  N.  J., 
1816,  pp.  222-224;  Miguel  Lerdo  de  Tejada,  op.  cit.,  passim. 


EARLY  FOREIGN  COMMERCE        191 

tions  on  trade  were  gradually  relaxed  but  the  commerce 
between  Mexico  and  the  Far  East  was  never  prosper- 
ous in  the  colonial  era,  nor  did  it  cover  even  as  wide  a 
range  of  articles  as  the  trade  with  the  home  country. 
Silver  went  westward,  also  some  iron,  cochineal,  cocoa, 
wine,  oil,  and  wool.  Eastward  the  cargo  was  chiefly  of 
silks.  Smaller  quantities  of  spices,  china,  and  other 
Oriental  wares  were  imported.3 

Almost  a  half -century  passed  between  the  ordinance 
of  free  commerce  of  1778  and  the  establishment  of  the 
republic,  but  the  actual  development  of  commerce  un- 
der the  new  conditions  was  disappointing.  Statistics 
are  incomplete  and  the  totals  were  probably  greater 
than  the  official  returns  show,  but  they  were  far  from 
satisfactory.  In  the  latter  portion  of  the  period,  1796  to 
1820,  the  average  announced  value  of  imports  was  10,- 
000,000  pesos,  that  of  the  exports  about  11,000,000.  The 
continuance  of  the  policy  of  shutting  out  foreigners,  the 
troubles  of  the  government  at  home,  international  con- 
flicts, and  an  illiberal  policy  in  Mexico  itself  prevented 
the  growth  that  might  have  occurred. 

The  main  characteristics  of  foreign  commerce  were 
unchanged.  Trade  went  by  Vera  Cruz  to  Acapulco. 
It  continued  to  go  in  fleets.  The  exports  were  silver 
plus  some  raw  materials;  the  imports  were  manufac- 


8  Chester  Lloyd  Jones,  "Spanish  Administration  of  Philippine 
Commerce,"  Proceedings  of  the  American  Political  Science  Associa- 
tion, vol.  3,  1906,  pp.  180-193.  The  intercolonial  trade  from  Mex- 
ico to  South  America  was  negligible.  Shipments  of  cocoa  were  made 
in  later  years  from  Caracas  to  Mexico  and  some  traffic  developed 
with  Cuba. 


tured  goods.  Foreign  trade  did  not  touch  the  Mexican 
people  in  their  daily  lives.  There  was  nothing  to  indi- 
cate that  the  trade  of  Mexico  with  the  more  advanced 
countries  would  soon  assume  the  character  of  their  trade 
with  each  other.  Even  in  amount  the  trade  was  disap- 
pointing and  showed  no  tendency  to  increase;  the  true 
economic  development  of  Mexico  was  still  unbegun. 

The  statistical  record  of  Mexican  commerce  for  the 
first  half-century  of  independence  is  highly  fragmen- 
tary, due  partly  to  a  failure  to  realize  the  importance  of 
such  a  record  and  partly  to  the  disturbed  conditions  in 
the  life  of  the  republic.  Plans  for  publications,  bravely 
undertaken,  were  seldom  continued  for  more  than  a  few 
years.  For  the  period  1828-53,  a  quarter  of  a  century, 
no  publication  of  a  commercial  balance  of  the  trade  of 
the  republic  occurred. 

What  the  trade  developments  were  is  further  ob- 
scured by  the  shifting  tariff  system  and  by  the  fact  that 
the  customs  house  accounts  were  often  neglected  com- 
pletely when  revolutionary  forces  got  control  of  the 
ports.  There  were,  moreover,  special  rates  collected  in 
certain  ports  of  entry  and  special  remissions  of  taxes 
to  persons  and  places.  Within  the  country  also  the  in- 
ternal customs  houses  collecting  the  octroi  taxes,  his- 
torically known  as  cUcabcHas,  were  a  burden  on  com- 
merce, the  effect  of  which  it  is  impossible  to  estimate. 

The  new  republican  government  threw  open  more 
ports  than  the  colonial  administration  and  allowed  the 
general  entry  of  foreign  owned  ships.  On  the  other 
hand,  the  general  tariff  policy,  if  that  phrase  can  be  used 
in  connection  with  anything  so  capricious  and  illogical 


EARLY  FOREIGN  COMMERCE        193 

as  the  early  Mexican  tariffs,  was  as  distinctly  illiberal  as 
the  navigation  policy  was  progressive.  Revenue  had  to 
be  raised  and  the  import  dues  were  the  main  reliance. 
Protection  of  industries  existing  and  to  be  born  was 
also  alleged  to  be  a  motive  back  of  the  customs  charges. 
As  a  result  the  customs  taxes  were  high,  so  high  in  many 
cases  as  to  prohibit  honest  importation,  lessen  the  in- 
come to  the  public  treasury  and  make  smuggling  a 
highly  profitable  and  not  disgraceful  business.  Some 
lines  of  goods,  and  for  a  time  the  list  showed  a  tendency 
to  grow,  could  not  be  imported  at  all.  Of  these  there 
were  245  items  in  the  tariff  of  August  14,  1843.  In 
spite  of  the  "protection"  thus  afforded,  local  manufac- 
ture did  not  grow.  The  only  industry  which  did  take 
root  was  cotton  manufacture,  which  began  in  a  small 
way  under  the  stimulus  of  a  special  subvention  included 
in  the  tariff  laws  of  April  6  and  October  16,  1830. 

A  careful  estimate  of  the  average  annual  import  trade 
for  the  first  quarter-century  of  independence  puts  the 
figure  at  20,000,000  pesos.4  The  chief  countries  con- 
tributing were  Great  Britain,  which  apparently  sent 
over  half  of  the  total ;  the  United  States,  which  sent  one- 
fifth;  and  France,  which  sent  about  one-eighth.  Tex- 
tiles were  the  most  important  item  from  Europe.  The 
United  States  trade  was  more  varied.  It  suffered  a 
sharp  decline  in  the  latter  years  of  the  period  due  to  the 
political  difficulties  which  finally  resulted  in  war. 

Import  trade  in  the  second  quarter-century  of  in- 
dependence was  still  far  from  prosperous.  Revolutions, 

*  Ibid.,  p.  52  et  seq. 


194    MEXICO  AND  ITS  RECONSTRUCTION 

frequently  changing  tariffs,  and  the  uncertainty  of  the 
rates  that  any  shipment  might  have  to  pay  continued  to 
make  importation  into  Mexico  a  gambling  business. 
The  disturbing  influence  of  the  Free  Zone  established  on 
the  northern  border  was  added  to  the  already  complex 
trade  problems  after  1858,  and  the  French  intervention 
made  conditions,  if  possible,  still  worse.  Only  with  the 
coming  of  the  Diaz  government  were  fairly  stable  rates 
of  customs  established.  Then  also  fairly  reliable  cus- 
toms reports  appeared,  the  first  of  which  was  published 
in  1878. 

Textiles  were  still  the  most  important  item  imported. 
They  made  up,  at  that  date,  54  per  cent  of  the  total. 
Hardware,  machinery,  and  metal  goods  formed  20  per 
cent,  and  groceries  and  liquors  16.  Great  Britain  still 
led  in  textiles,  which  were  the  great  bulk  of  her  exports 
to  Mexico.  Local  manufacture,  however,  under  the 
high  protection  and  unusual  prices  obtainable  during 
the  American  Civil  War,  had  established  itself  and,  in 
certain  lines  widely  used  by  the  common  people,  was 
driving  the  foreign  goods  out  of  the  market.  Metal 
manufactures  still  came  almost  exclusively  from 
abroad.  Railway  iron  and  steel  came  from  England, 
engines  and  cars  from  the  United  States.  The  latter, 
even  at  this  early  time,  took  the  lead  in  the  shipment  of 
agricultural  machinery,  and  Germany  led  in  hardware. 
The  groceries  trade  had  already  found  the  channels  in 
which  it  has  to  a  large  degree  remained.  Flour,  bread- 
stuffs,  and  canned  provisions,  at  the  end  of  the  pre-Diaz 
period,  came  chiefly  from  the  United  States,  wines  and 
spirits  from  France,  and  olives  and  olive  oil  from  Spain. 


EARLY  FOREIGN  COMMERCE        195 

The  quarter-century  before  the  Diaz  regime  saw  a 
lively  international  contest  for  Mexican  imports.  In 
1853  it  appears  that,  of  the  total  value  of  some  26,000,- 
000  pesos,  Great  Britain  furnished  almost  50  per  cent 
and  France  and  the  United  States  about  17  per  cent 
each.  The  German  states  then  contributed  about  7  per 
cent.  Thereafter  there  were  various  ups  and  downs 
in  which  the  United  States  definitely  forged  ahead  of 
France  in  the  middle  '70s  and  in  1878  passed  ahead  of 
Great  Britain,  never  again  to  be  overtaken.  France, 
meanwhile,  fell  to  the  position  of  a  minor  competitor. 
For  her  and  for  Great  Britain  the  advance  of  the  rail- 
ways, then  being  planned  in  the  north,  meant  a  steadily 
growing  handicap  in  competition  for  Mexican  trade. 

Turning  now  to  the  export  trade  during  the  first  half- 
century  of  Mexican  independence,  we  find  statistics  as 
unsatisfactory  as  in  the  case  of  imports.  They  are,  in 
fact,  so  unsatisfactory  that  the  best  method  of  arriving 
at  the  character  and  value  of  the  goods  that  were  sent 
abroad  is  to  study  the  returns  of  imports  from  Mexico 
as  published  by  her  chief  customers:  Great  Britain, 
France,  and  the  United  States.  The  shipments  in  the 
first  quarter-century  of  independence  were  unimportant, 
except  for  precious  metals  and  cochineal.  In  the  sec- 
ond a  better  showing  was  made.  A  greater  variety  of 
articles  made  their  appearance — earnest  of  what  would 
occur  once  the  country  was  opened  up  to  foreign  com- 
merce. 

Between  1850  and  1878  a  sharp  international  rivalry 
went  on  between  Great  Britain,  the  United  States,  and 
France  for  the  control  of  both  of  the  branches  into  which 


196    MEXICO  AND  ITS  RECONSTRUCTION 

Mexican  exports  naturally  fall.  In  buying  merchandise 
from  Mexico  the  countries  ranked  in  the  order  named 
at  the  beginning.  Under  the  stimulus  of  the  high  prices 
obtainable  during  the  American  Civil  War  the  trade  of 
the  first  two  was  greatly  increased,  and  Great  Britain 
shot  far  ahead  of  her  competitors.  At  the  end  of  the 
conflict  trade  values  fell  again  and  in  1867  the  three 
were  in  the  same  relative  positions  as  a  decade  before. 
Two  years  later,  however,  the  United  States  passed 
Great  Britain,  taking  a  lead  which  was  to  be  greatly  ac- 
centuated by  the  opening  of  the  railway  era.  By  1881 
the  United  States  held  a  share  almost  as  great  as  that 
of  the  other  two  nations  combined. 

In  the  bullion  and  specie  trade  the  United  States 
took  the  lead  earlier  for  reasons  largely  connected  with 
the  monetary  policy  of  the  country.  In  fact,  by  1857 
the  bullion  purchases  of  Great  Britain  and  France  were 
almost  negligible.  During  the  Civil  War  period  the 
American  share  declined  rapidly  and  the  monetary  leg- 
islation of  the  various  countries  in  the  years  following 
made  the  course  of  silver  shipments  highly  unstable. 
Beginning  with  1876,  shipments  to  the  United  States 
regularly  exceeded  those  to  either  France  or  Great 
Britain.6 

Compared  to  the  total  import  and  export  trade  at  the 
end  of  the  first  quarter-century  of  Mexican  independ- 
ence, the  showing  in  the  early  '70s  was  satisfactory.  Im- 
ports were  somewhat  less  than  30,000,000  pesos  in 

"Exports  of  metals,  like  imports,  doubtless  would  have  shown 
a  much  better  total  but  for  the  unfortunate  taxing  system — one  that 
discouraged  honest  enterprise  and  encouraged  smuggling. 


EARLY  FOREIGN  COMMERCE        197 

1872-3.  The  exports  to  the  three  chief  customers  aver- 
aged about  $27,000,000  for  the  five  years  ending  1876." 
But,  though  the  relative  gain  was  good,  the  actual  in- 
creases in  both  lines  were  unsatisfactory.  Fortunately 
fibers,  coffee,  hides  and  skins,  and  valuable  woods  were 
increasing  in  importance  in  the  export  figures  foreshad- 
owing a  time  when  the  products  saleable  abroad  would 
have  greater  variety. 

It  is  hard  for  us  to  realize  now  the  handicaps  under 
which  commerce  was  carried  on  in  Mexico  in  the  pre- 
Diaz  period.  Goods  could  be  transported  only  at  great 
expense.  Only  those  that  combined  high  value  with 
small  bulk  could  stand  the  cost  of  carriage  for  any  great 
distance  and  the  most  important  of  even  these  were  so 
heavily  burdened  with  transportation  costs  and  internal 
taxes  that  production  for  more  than  local  use  was  profit- 
able only  under  the  most  favorable  natural  circum- 
stances. 

The  commercial  situation  was  like  that  of  the  pioneers 
who  settled  beyond  the  Alleghanies  in  the  early  years 
of  the  United  States  and  found  that  the  cheapest  way 
for  them  to  market  their  corn  was  to  change  it  into  whis- 
key so  that  transportation  charges  might  be  as  low  as 
possible.  The  conditions  were  similar  except  that  there 
existed  in  Mexico  no  navigable  rivers  that  might  serve 
as  natural  highways  by  which  to  reach  the  sea  and  the 
outside  world.  Even  after  the  middle  of  the  century 
litters  carried  by  mules  or  men  were  used  for  passenger 
travel  between  Vera  Cruz  and  interior  points  and  re- 

6  Calculated  from  the  import  returns  reported  for  the  United 
States,  Great  Britain,  and  France. 


198    MEXICO  AND  ITS  RECONSTRUCTION 

liable  diligences  were  still  rare.  In  1878,  long  after  the 
resources  of  her  northern  neighbor  had  been  tapped, 
there  was  still  no  railway  net  and  the  local  highways 
were  seldom  worthy  of  the  name.  Transportation  by 
pacls  mules,  or  at  best  by  wagons  drawn  by  mules  or 
oxen,  was  slow  and  costly  but  the  only  means  available. 

Those  who  had  dealings  requiring  the  shipment  of 
money  long  distances,  and  this  included,  of  course,  all 
engaged  in  foreign  trade,  found  the  transfer  of  credits 
a  great  handicap.  Exchanges  by  draft  were  not  gen- 
erally understood  or  used.  A  fair  average  of  the  ex- 
pense for  interior  remittances  from  Mexico  City  cited 
in  1878  was  eight  to  ten  per  cent  to  Chihuahua,  five  or 
six  to  Morelia,  and  four  or  five  to  Oaxaca.  If  money 
went  abroad,  the  charge  was  still  greater.  In  1868  the 
taxes  and  cost  of  transportation  of  silver  sent  from 
Mexico  City  to  the  Bank  of  England  were  25  per  cent 
of  the  value  of  the  shipments. 

Conditions  were  rapidly  developing  to  the  northward 
which  were  sure  to  bring  great  impetus  to  Mexican 
trade,  and  at  least  partially  remove  its  disadvantages. 
The  United  States  was  beginning  to  come  into  the  mar- 
ket for  raw  products  and  to  sell  her  manufactures.  Reg- 
ular steamship  communications,  discontinued  during  the 
Civil  War,  were  reestablished  in  1868  and  the  railroads 
at  the  close  of  the  pre-Diaz  regime  were  breaking  their 
way  through  the  southwest  toward  the  northern  frontier 
of  Mexico.  To  assure  a  great  increase  in  the  import  and 
export  trade  of  Mexico  only  the  establishment  of  order 
and  a  better  system  of  communications  within  the  coun- 
try were  needed. 


CHAPTER  XVI 

THE  FOREIGN  COMMERCE  OF  MEXICO:     THE 
DIAZ  REGIME  AND  AFTER 

FROM  the  '70s  until  1892  the  statistics  of  Mexican  im- 
ports are  only  less  fragmentary  than  those  in  the  years 
before  the  Diaz  regime.  Frequent  tariff  changes  dis- 
turbed what  would  have  been  the  course  of  development 
and  the  tariff  classifications  are  not  such  as  make  easy 
the  analysis  of  the  trade  as  a  reflection  of  changing  na- 
tional economic  demands.  This  latter  difficulty,  in  fact, 
continues  up  to  the  present  time. 

The  textile  trade,  which  was  the  characteristic  feature 
of  Mexican  imports  in  the  preceding  periods,  continued 
to  be  the  most  important  factor  though  less  important 
in  comparison  with  the  total  imports,  and  less  impor- 
tant when  compared  to  the  total  consumption,  for  a  local 
industry  was  developing,  which,  through  high  tariff  pro- 
tection, was  gaining  ground  steadily. 

In  1872-3,  58  per  cent  of  the  total  invoice  value  of 
imports  was  made  up  of  textiles,  a  position  maintained 
as  late  as  1884.  Then  conditions  changed  rapidly.  In 
1889-90  the  value  imported  had  risen  but  the  percentage 
of  the  total  had  fallen  to  22  per  cent.  Local  competi- 
tion was  gaining  strength  and  the  demands  of  Mexico 
on  the  world's  markets  were  becoming  diversified  and 
greater.  Textile  imports,  therefore,  took  a  less  promi- 
nent place.  The  decline  in  their  relative  importance  in 

199 


200    MEXICO  AND  ITS  RECONSTRUCTION 

the  period  from  the  early  '90s  to  1912-13  was  steady. 
The  value  doubled  in  this  period  but  the  proportion  of 
the  total  sank  to  13  per  cent. 

To  a  very  considerable  degree  the  passing  of  the  im- 
portance of  these  goods  reflects  the  decline  of  the  British 
leadership  in  Mexican  imports.  For  generations  tex- 
tiles have  been  one  of  the  characteristic  features  of  Brit- 
ish trade  and  at  one  time  they  were  not  only  the  chief 
item  of  Mexican  imports  but  practically  an  undisputed 
British  field.  By  1912-13  they  were  neither.  Mexican 
and  foreign  competition  was  pressing  British  manufac- 
turers hard.  The  cotton  thread  and  handkerchiefs  im- 
ported were  still  practically  all  British.  A  large  share 
of  the  lace  trade  and  of  that  in  coarse  cottons  had  been 
lost.  In  the  better  trade  in  piece-goods  British  mills 
still  made  about  seven-eighths  of  the  imports.  Wool 
yarn  imports  came  from  Germany,  light  wool  goods 
chiefly  from  France;  only  in  the  heavier  woolens  was  the 
wool  trade  distinctively  British.  Serious  inroads  were 
made  on  a  number  of  less  important  branches. 

It  is  impossible  to  analyze  satisfactorily  the  develop- 
ments in  Mexican  imports  other  than  textiles.  In  the 
first  part  of  the  Diaz  regime  the  classifications  are  often 
according  to  the  rate  of  tariff  paid  and  in  the  later  years 
on  physical  characteristics  rather  than  utility.  In  gen- 
eral, the  government  followed  the  policy  of  favoring  the 
introduction  of  materials  that  did  not  compete  with 
Mexican  industry  and  which,  through  encouragement 
of  industry,  would  give  a  stimulus  to  the  development 
of  the  republic.  It  frequently  freed  such  goods  from 
tariff  charges.  The  tariff  of  1872-3  allowed  but  12  per 


RECENT  FOREIGN  COMMERCE      201 

cent  of  the  imports  to  enter  free  of  duty.  That  of 
1884-5  gave  similar  treatment  to  22.9  per  cent  of  the 
imports. 

On  the  other  hand,  Mexico  sought  to  have  foodstuffs 
produced  within  the  country.  Imports  were  loaded  with 
increasing  tariff  rates,  with  the  result  that  between 
1872-3  and  1888-9  the  proportion  of  foodstuff  items  in 
the  total,  and  their  actual  value  fell  off  sharply.  The 
economic  advance,  which  was  then  under  way,  however, 
was  so  rapid  that  in  the  latter  part  of  the  Diaz  regime 
foodstuff  demands  were  so  great  that  imports  increased 
in  spite  of  the  high  tariffs  and  greater  local  production. 

After  1892  the  chief  tariff  classifications  are  animal 
substances,  vegetable  substances,  minerals,  textiles,  and 
their  manufactures,  and  machinery  and  apparatus.  It 
is  not  possible  to  trace  such  groups  as  foodstuffs  through 
these  figures  satisfactorily,  so  comparisons  must  follow 
the  Mexican  classifications.  They  show  a  remarkable 
expansion  of  Mexican  imports  reflecting  the  rapid  eco- 
nomic exploitation  of  the  country.  Between  1893-4 
and  1912-13  imports  of  animal  substances  increased  four 
fold  in  value.  Leather  goods  and  preserved  meats,  lard 
and  wool  imports,  all  indicative  of  a  higher  standard  of 
life  than  the  Mexican  had  formerly  enjoyed  and  of  the 
demand  created  by  the  presence  and  example  of  the 
foreigner,  constituted  more  than  one-half  of  the  total 
in  the  class. 

Imports  of  vegetable  substances  increased  between 
1893-4  and  1912-13  over  two  and  a  half  fold.  The 
growth  was  general  in  a  large  number  of  lines,  the  most 
important  of  which  was  cotton.  The  local  cotton  pro- 


202    MEXICO  AND  ITS  RECONSTRUCTION 

duction  has  not  been  great  enough  to  supply  the  de- 
mand of  the  Mexican  mills  and  increasing  supplies  have 
had  to  be  drawn  from  the  United  States. 

From  the  Mexican  point  of  view  the  two  tariff  classes, 
minerals,  and  machinery  and  apparatus  with  the  allied 
class,  chemical  products,  are  the  ones  that  show  the  most 
interesting  development  in  the  national  import  trade. 
In  the  old  days  quicksliver  went  into  Mexico  and  metal 
products  went  out.  Except  for  quicksilver,  imports  of 
mining  products  were  negligible.  Machinery  was  con- 
spicuous in  Mexican  trade  by  its  unimportance,  so  also 
were  chemical  products.  But  the  Diaz  regime  brought 
these  unimportant  factors  to  the  forefront.  They  dis- 
placed textiles  as  the  outstanding  feature  of  Mexican 
imports.  They  were  important  for  the  development  of 
the  country  because  they  represented  the  goods  drawn 
from  abroad  for  its  economic  regeneration.  The  first 
two  classes  together  increased  almost  fourfold  between 
1893-4  and  1912-13.  Chemical  and  pharmaceutical  im- 
,  ports  increased  six  fold.  These  were  figures  that  re- 
flected the  purchases  abroad  of  the  iron  and  steel,  tin, 
copper,  coal,  coke,  electrical  goods,  agricultural  and 
other  machinery,  and  railway  equipment,  which  were 
so  important  a  factor  in  creating  the  new  Mexico. 

One  of  the  most  interesting  features  of  a  country's 
foreign  commerce  is  brought  out  by  the  study  of  the 
source  of  supply  of  its  imports  and  the  destination  of 
its  exports.1  Since  before  the  beginning  of  the  DiaZ 


1  The  comparisons  that  follow  are  not  exact  because  tranship- 
ment trade  is  not  satisfactorily  shown  in  Mexican  statistics. 


RECENT  FOREIGN  COMMERCE       203 

regime  only  four  nations  have  figured  prominently  in 
Mexican  import  trade.  Great  Britain,  the  United 
States,  Germany,  and  France  furnished  over  90  per  cent 
of  the  total  in  1872-3,  92  per  cent  in  1892-3,  89.5  per  cent 
in  1902-3,  and  87.3  per  cent  in  1912-13.  After  the  be- 
ginning of  the  World  War  the  United  States  came  to 
have  a  practical  monopoly  of  Mexican  foreign  trade. 

Among  these  nations  there  has  been  a  long  contest 
for  control  of  the  commerce.  In  1872-3  Great  Britain 
was  in  the  lead,  with  about  35  per  cent  of  the  total.  It 
would  be  hard,  of  course,  to  maintain  such  a  share  as  the 
general  exports  from  the  nearby  United  States  devel- 
oped. This  was  particularly  true  with  the  establishment 
of  railroad  connections  across  the  northern  border. 

At  the  beginning  of  the  next  20-year  period  the  ship- 
ments to  Great  Britain  had  sunk  to  slightly  over  13  per 
cent,  which  continued  to  be  about  her  share  in  1902-3 
and  1912-13.  British,  French,  and  German  competition 
for  a  share  in  Mexican  trade  was  keen  throughout  the 
Diaz  regime.  France  controlled  16  per  cent  of  the  total 
in  1872-3.  She  had  the  advantage  of  dealing  in  lines 
that,  to  a  large  extent,  were  composed  of  distinctively 
national  products,  but  her  trade  in  many  branches  was 
not  easily  expandable  because  the  public  that  con- 
sumed her  products  in  Mexico  was  not  large  nor  of 
rapidly  increasing  numbers.  Germany,  on  the  other 
hand,  soon  began  to  bid  for  the  trade  in  iron  goods  and 
textiles  and  to  come  into  intimate  competition  with 
Great  Britain  and  later  with  the  United  States. 

By  1892-3  Great  Britain  had  fallen  from  first  place 
and  was  clearly  outclassed  by  the  United  States.  She 


204    MEXICO  AND  ITS  RECONSTRUCTION 

still  led  France,  though  by  a  narrow  margin  only.  Ger- 
many and  France  together  then  had  a  trade  40  per  cent 
greater  than  the  British.  Relatively  Great  Britain  was 
losing  even  in  comparison  with  her  European  competi- 
tors. At  the  opening  of  the  next  10-year  period  French 
and  German  trade  had  again  gained ;  it  was  60  per  cent 
greater  than  that  of  Great  Britain.  Meanwhile  Ger- 
many had  passed  France  in  1901,  not  again  to  be  over- 
taken, and  a  close  contest  for  second  place  in  Mexican 
imports  was  occurring  between  her  and  the  former 
\f  leader.  In  four  years  in  the  decade  following  1902-3 
German  trade  was  greater  than  British  and  in  many 
lines  was  offering  sharp  competition  to  that  of  the 
United  States. 

The  rise  of  German  trade  was  the  most  striking 
feature  of  Mexican  imports  from  European  countries. 
In  1872-3  the  total  credited  to  the  German  states  was 
only  3,890,496  gold  pesos.  Twenty  years  later  it  had 
fallen  to  3,322,700.  Then  began  a  steady  rise.  In  the 
decade  ending  1902-3  it  almost  tripled  and  in  1902-3  to 
1912-13  increased  another  30  per  cent.  Had  peace  con- 
tinued it  does  not  seem  unlikely  that  Germany  might 
have  established  herself  in  firm  control  of  second  place 
in  Mexican  imports. 

First  place,  meanwhile,  had  definitely  fallen  to  the 
United  States.  Before  the  railway  era  in  1872-3  one- 
fourth  of  the  imports  came  from  the  United  States,  in 
spite  of  the  lack  of  rail  routes  between  the  two  countries. 
Twenty  years  later  over  60  per  cent  did  so.  In  1902-3 
54  per  cent  of  the  imports  came  from  the  United  States; 
in  1907  almost  63  per  cent;  and  in  1912-13,  51  per  cent. 


RECENT  FOREIGN  COMMERCE      205 

Railroads,  propinquity,  and  the  rapidly  growing  manu- 
facturing industries  of  the  northern  republic  assured  it 
the  greater  part  of  Mexican  import  trade.  These  ad- 
vantages were  temporarily  increased  by  the  World 
War,  which  made  the  United  States  almost  the  exclusive 
market  in  which  Mexico  purchased  for  import.  Parallel 
with  that  of  imports  there  was  in  process,  meanwhile,  a 
rapid  growth  in  export  trade  and  a  contest  for  its  con- 
trol. The  shipments  out  of  Mexico  naturally  fall  into  \s 
two  great  classes — the  mining  products  and  all  others. 
Historically  the  characteristic  exports  of  Mexico  are  the 
precious  metals.  As  late  as  1872-3  they  were  81  per  \s 
cent  of  the  total.  But  though  they  continued  to  rise  in 
yield  they  fell  in  relative  importance.  The  total  metals 
export  was  valued  at  20,294,321  pesos  in  1874-5.  Twen- 
ty years  later  the  precious  metals  sent  abroad  were  worth 
52,535,854  pesos,  30  years  later  93,885,526  pesos,  and 
in  1912-13,  130,885,339  pesos.  But  in  the  same  period 
commodities  exports  had  risen  in  even  greater  propor- 
tion. In  1874-5  they  had  been  worth  7,024,467  pesos; 
20  years  later  they  were  worth  38,319,099  pesos;  30 
years  later  in  1904-5,  114,634,924  pesos.  At  this  latter  ^ 
date  commodities  exports  had  already  passed  the 
precious  metals  exports  in  value,  and  in  1912-13  they 
rose  further  to  169,520,212  pesos'  worth.  In  other 
words,  while  precious  metals  exports  had  increased  650 
per  cent,  those  of  commodities  rose  2,300  per  cent.  This 
meant  that  Mexico  was  less  distinctively  a  mining  coun- 
try than  at  any  time  in  her  history.  Her  mining,  too, 
was  becoming  less  characteristically  devoted  to  the 
precious  metals,  especially  silver. 


206    MEXICO  AND  ITS  RECONSTRUCTION 

There  is  no  reason  to  believe  that  Mexico  will  cease 
to  be  one  of  the  world's  great  sources  of  silver  supply, 
but  in  recent  decades  other  mining  products  have  as- 
sumed an  increasing  importance.  The  exploitation  of 
the  base  metals  has  had  an  extraordinary  development 
and  the  oil  resources  have  been  developed  so  rapidly  that 
the  total  yield  of  the  country  is  now  determined  by  the 
conditions  under  which  the  product  may  be  marketed, 
not  by  the  amount  the  wells  are  capable  of  producing. 

The  growth  of  this  export  is  a  twentieth  century  de- 
velopment. There  was  a  small  sale  of  local  oil  products 
for  about  a  decade  preceding  the  beginning  of  the  export 
trade.  The  total  production  reported  was  75,375  barrels 
in  1903  and  3,634,080  in  1910.  The  first  cargo  of  crude 
oil  left  Tampico  May  20, 1911,  by  an  American  steamer. 
Thereafter  the  growth  in  production  was  rapid  and  all 
but  a  small  part  went  directly  into  the  export  trade.  In 
1911  a  total  of  12,552,798  barrels  was  produced.  By 
1913  an  increase  of  over  100  per  cent  was  recorded,  the 
total  being  25,696,291  barrels.  During  the  war  the  pro- 
duction continued  to  rise  and  could  have  been  increased 
still  further  had  it  been  necessary,  for  the  potential  yield 
of  the  wells  had  now  outrun  the  ability  to  market  the 
product.  The  total  for  1917  was  55,292,770 ; 2  for  1918, 

53,919,863;  for  1919,  87,072,955;  and  for  1920, 156,062,- 

77  '•'•-•.'.'.  >        '....'•-* 

707  barrels. 

*•. 

2  The  statistics  of  production  up  to  and  including  1917  are  as 

reported  by  the  Petroleum  Bureau,  Department  of  Industry  and 
Labor,  Mexico  City,  as  quoted  in  John  D.  Northrup,  Petroleum  in 
1917,  Washington,  1919,  p.  875.  The  figures  for  subsequent  years 
are  as  reported  in,  the  New  York  Times  July  2,  1921,  quoting 


RECENT  FOREIGN  COMMERCE      207 

In  spite  of  the  importance  of  this  growth  it  must  not 
be  overlooked  that  the  most  significant,  and  for  the  re- 
public the  most  important,  developments  in  her  export 
trade  in  the  last  generation  have  been  in  other  lines.  No 
nation  whose  prosperity  depends  on  a  few  products  is 
ever  on  a  sound  economic  basis.  Exhaustion  of  re- 
sources, bad  growing  seasons,  and  bad  market  conditions 
always  have  possibilities  of  national  disaster  for  such  a 
state.  A  nation  is  secure  only  when  by  the  variety  of  its 
products  it  can  escape  the  difficulties  that  may  at  any 
time  attend  the  production  of  a  few  of  them.  Mexico 
at  the  beginning  of  the  Diaz  regime  was  in  the  condition 
first  mentioned.  At  its  end  she  had  progressed  far  to- 
ward the  second  standard. 

To  be  sure  manufactures  continue  to  have  but  a  weak 
development  but  agricultural  and  forest  products  have 
become  diversified  in  the  last  generation  and  the 
economic  foundation  upon  which  the  Mexican  national 
life  rests  has  undoubtedly  been  broadened  thereby. 
Moreover,  the  growth  of  the  list  of  exports  represents 
not  only  a  stabilizing  element  in  national  commerce  but 
a  development  toward  a  standard  that  favors  a  demo- 
cratic government. 

Though  Mexico  still  has  many  cases  that  seem  to  indi- 
cate the  contrary,  agriculture  is  the  small  man's  business. 
It  is  the  occupation  which,  in  the  development  of  nations, 


W.  C.  Teagle,  President  of  the  Standard  Oil  Company  of  New 
Jersey.  Rafael  Alcerraca,  chief  of  the  Petroleum  Department  of 
the  Mexican  government,  estimates  1920  production  at  163,000,000 
barrels,  New  York  Times,  June  18,  1921. 


208    MEXICO  AND  ITS  RECONSTRUCTION 

has  given  the  first  great  impulse  toward  respect  for  the 
rights  of  one's  fellowman,  and  toward  a  desire  for  order. 
It  is  the  occupation  in  which  individual  initiative  and 
industry  first  received  impetus.  Mexico  will  find  it  of 
the  highest  importance  to  foster  the  growth  of  her 
classes  who  live  independently  upon  the  land,  if  the  re- 
public is  to  become  what  it  never  has  been,  a  truly  demo- 
cratic government. 

The  agricultural  exports  reflect  but  imperfectly  the 
degree  to  which  this  development  has  already  taken 
place  in  Mexico,  for  the  reason  that  many  of  the  lines  in 
which  harvests  have  been  greatly  increased  enter  export 
but  slightly  and  because  even  some  of  agricultural 
products  that  are  exported,  such  as  henequen,  are  not 
typically  the  yield  of  small  holdings.  Nevertheless 
there  can  be  no  question  that  the  diversification  of  agri- 
cultural products  and  of  the  export  of  them  is  indica- 
tive of  a  change  in  the  national  life  of  fundamental 
importance. 

From  still  another  point  of  view  this  development  is 
interesting.  It  reflects,  to  a  degree,  a  development  of 
hot  lands  heretofore  disliked  and  neglected  by  both  na- 
tive and  foreigner.  Henequen,  coffee,  rubber,  vanilla, 
and  chicle,  among  the  vegetable  exports,  are  names  that 
suggest  tropical  climates. 

The  growth  of  the  agricultural  exports  of  Mexico  can 
only  be  sketched  here.  Up  to  the  present  henequen 
fiber,  or  sisal,  has  come,  almost  entirely,  from  Yucatan. 
It  is  the  material  from  which  the  greater  part  of  the 
binder  twine  used  in  the  United  States  is  made  and  it 
finds  almost  its  exclusive  market  in  that  country.  The 


RECENT  FOREIGN  COMMERCE      §69 

export  in  1877-8  was  valued  at  1,078,076  pesos,  that  fo£ 
1912-13  was  worth  31,133,755  pesos.3 

The  value  of  exported  sisal  increased  remarkably  dur- 
ing the  World  War  but,  like  the  figures  of  international 
trade  in  many  other  lines,  this  reflected  a  development  of 
exceptional  character  and  not  one  that  can  be  expected 
to  continue  in  times  of  peace.  With  supplies  of  Manila 
hemp  cut  to  a  minimum  by  the  war,  Yucatan  producers 
met  an  exceptional  market  for  their  product.  In  addi- 
tion the  local  government  set  up  a  system  of  market  con- 
trol that  forced  the  prices  still  higher.  As  a  result  sisal 
fiber,  which  sold  at  an  average  of  $.055  United  States 
gold  per  pound  in  the  five  years  before  the  war,  rapidly 
rose  in  nominal  value  reaching  a  peak  of  $.2125  United 
States  gold  per  pound  at  one  time  during  the  conflict. 
Such  returns  are  now  a  thing  of  the  past.  In  1921 
sisal  was  back  to  its  prewar  price  level.  The  market  was 
depressed  by  large  stocks,  and  a  production  more  than 
sufficient  for  the  decreased  peace  time  demand.  How- 
ever, the  advance  that  had  been  made  in  pre-war  times 
will  be  maintained.  It  is  beyond  doubt  that  Mexico's 

3  Tables  of  the  exports  of  henequen  are  found  in  Luis  Pombo, 
Mexico:  1876-1892,  Mexico,  1893;  Matias  Romero,  Mexico  and  the 
United  States,  New  York,  1898;  Statistical  abstract  for  the  prin- 
cipal and  other  foreign  countries,  etc.  .  .  .  London,  1907  and  1912; 
Reports  from  Her  Majesty's  diplomatic  and  consular  agents  abroad 
on  subjects  of  commercial  and  general  interest,  Commercial  No.  36 
(1883),  Part  VII,  Report  by  Mr.  Lionel  E.  G.  Garden  on  the  trade 
and  commerce  of  Mexico,  1883;  Anuario  de  estadistica  fiscal,  Mexico, 
1913  and  1914;  and  in  the  Boletin  de  estadistica  fiscal,  ano  fiscal 
1910-11,  Mexico,  1912.  The  statistics  quoted  for  other  agricul- 
tural products  in  the  following  paragraphs  are  from  these  author- 
ities. 


210    MEXICO  AND  ITS  RECONSTRUCTION 

sisal  production  will  contribute  increasingly  to  her 
foreign  trade.  Other  vegetable  fibers,  especially  ixtle 
and  broom  root,  have  also  been  exported  in  increasing 
quantities. 

Coffee  culture  was  introduced  into  Mexico  from  the 
West  Indies.    Two  areas,  one  on  the  Atlantic  with  the 
cities  Orizaba  and  Cordova  as  centers,  and  the  other  on 
the  Guatemalan  border,  have  proven  especially  suited  to 
this  crop.    The  United  States  has  always  been  the  chief 
buyer.    Before  1870  exports  were  negligible.    By  1878 
they  had  risen  to  a  value  of  1,242,041  pesos  and  in 
1912-13  to  11,263,701  pesos.    Raw  tobacco,  of  which  a 
value  of  132,971  pesos  was  exported  in  1872-3,  was  sent 
abroad  to  the  amount  of  1,002,611  pesos  in  1912-13. 
Chick  peas,  garbanzos,  were  apparently  first  exported  in 
1882-3,  when  a  value  of  28,855  pesos  was  shipped.    In 
1912-13  garbanzos  worth  4,930,362  pesos  left  the  coun- 
try.   Rubber  exports  began  to  be  important  in  1896-7. 
They  rose  rapidly  to  a  value  of  21,187,770  pesos  in 
1910-11,  the  highest  value  they  ever  reached.     In  the 
same  year  guayule  was  exported  to  a  value  of  11,797,910 
pesos  Mexican  currency.    Important  increases  are  also 
to  be  noted  in  cabinet  and  dyewoods,  vanilla,  chicle,  cat- 
tle, and  hides  and  skins.    The  diversification  of  Mexican 
exports  is  illustrated  by  a  comparison  of  the  articles 
exported  to  the  amount  of  1,000,000  pesos  at  various 
periods.     Besides  the  precious  metals,  there  were  in 
1877-8  only  three  such  articles,  in  1882-3  only  four,  in 
1891-2  only  five.    Then  came  the  period  of  rapid  devel- 
opment.   There  were  12  articles  besides  mineral  prod- 
ucts in  this  class  in  1902-3  and  in  1912-13  there  were  14. 


RECENT  FOREIGN  COMMERCE      211 

The  enumeration  of  the  chief  items  of  Mexican  ex- 
port  is  evidence  of  the  degree  to  which  the  republic  con- 
tinues to  be,  so  far  as  its  export  trade  is  concerned,  a  raw 
product  country.  In  some  lines  manufactures  have  been 
developed  to  satisfy  a  large  part  of  the  local  market,  but 
even  in  1912-13  they  constituted  only  1.1  per  cent  of 
the  total  exports.  The  chief  factors  in  exports  of  manu- 
factures were  cheap  hats  and  manufactured  tobacco. 

The  changes  in  the  international  shares  of  Mexican 
trade  already  noted  in  connection  with  imports  were 
even  more  marked  in  the  export  trade.  Precious  metals 
shipments  in  the  middle  '80s  were  about  evenly  taken 
by  Great  Britain  and  the  United  States,  then  the  latter 
took  the  lead  and  held  it  steadily  thereafter.  Its  share 
rose  to  about  three-fourths  of  the  total  in  the  middle 
'90s  and  it  stood  at  a  little  above  that  point  in  1912-13. 
Since  the  outbreak  of  the  World  War  exports  to  coun- 
tries otEer  than  the  United  States  have  been  only  a  negli- 
gible percentage  of  the  total. 

In  the  commodity  market  in  general  Mexico  has  never 
sold  to  any  one  on  as  good  terms  as  to  the  United  States. 
That  country  led  even  before  the  Diaz  regime,  its  next 
competitor,  Great  Britain,  even  then,  taking  only  about 
a  value  one- fourth  as  great.  As  early  as  1878,  60  per 
cent  of  the  commodity  exports  went  to  the  United 
States.  By  the  '90s  over  three-fourths  of  the  total  took 
that  direction.  In  1912-13,  77.2  per  cent  went  to  the 
northern  neighbor  of  Mexico — about  the  same  per  cent 
of  the  total  as  in  the  case  of  the  precious  metals  exports. 

In  spite  of  Mexican  distrust  and  in  the  face  of  the 
failure  of  the  average  American  to  understand  the  Mex- 


212    MEXICO  AND  ITS  RECONSTRUCTION 

ican  point  of  view,  the  trade  relations  between  the  two 
great  republics  of  the  North  American  continent  have 
grown  increasingly  intimate  and  important.     The  mu- 
tual economic  interests  are  so  interrelated  and  funda- 
mental that  they  have  proven  and  will  continue  to  prove 
so  powerful  that  no  political  propaganda  can  counter- 
act them.    There  is  no  true  geographical  boundary  be- 
tween the  two  countries,  and  communications  between 
them  by  both  land  and  sea  are  well  developed,  better 
developed  indeed  than  between  many  regions  within 
Mexico  itself.    The  economic  development  of  the  two 
is  highly  contrasted  but  supplemental.     The  United 
States  is  the  best  market  for  what  Mexico  has  to  sell  and 
the  easiest  source  of  supply  for  what  she  wishes  to  buy. 
In  1912-13  Mexico  bought  almost  four  times  as  much 
from  the  United  States  as  from  any  other  country  and 
more  than   from   all   other   countries   combined.     In 
1912-13  Mexico  sold  to  the  United  States  over  seven 
times  as  much  as  to  any  other  country  and  almost  four 
times  as  much  as  to  the  five  nations  next  in  importance 
in  Mexican  export  trade.    The  percentages  have  risen 
still  higher  during  and  since  the  World  War  but  are 
not  indicative  of  a  condition  that  will  continue  in  normal 
times.    These  latter,  however,  will  not  fail  to  demon- 
strate the  essential  commercial  unity  of  interest  of  the 
two  republics. 

That  there  should  be  friendly  relations  between  two 
states  bound  so  closely  together  by  their  material  in- 
terests seems  axiomatic.  That  the  international  ex- 
change between  the  two  countries  is  to  their  mutual  ad- 
vantage is  not  likely  to  be  disputed;  nor  is  it  subject  to 


RECENT  FOREIGN  COMMERCE      213 

question  that  this  trade  is  of  very  much  greater  impor- 
tance to  Mexico  than  to  the  United  States.  In  Mexico's 
total  trade  this  commercial  interchange  with  the  United 
States  is  not  only  the  dominant  factor  but  the  greater 
part  of  its  total  foreign  commerce,  a  position  which  the 
same  trade  is  far  from  occupying  in  the  case  of  the 
United  States. 

Those  who  wish  a  resumption  of  orderly  development 
in  Mexico  cannot  overlook  the  part  that  foreign  com- 
merce played  in  the  old  regime  in  placing  the  country  on 
its  feet,  giving  work  to  the  people,  and  resources  to  the 
government  to  carry  out  the  progressive  measures  it 
supported.  They  should  not  forget  to  what  degree  that 
commerce  was  made  possible  through  the  United  States 
market  and  the  enterprise  of  Americans  who  came  to  the 
republic  with  their  capital. 

The  trade  of  Mexico  in  the  early  '70s  presents  but  a 
sorry  contrast  to  that  in  the  opening  decade  of  the  twen- 
tieth century.  Imports  were  stationary  at  about  30,000,- 
000  pesos.  Exports  were  worth  about  the  same  amount. 
Railroads  were  practically  unknown.  Only  the  most 
valuable  products  could  be  imported  or  exported.  Good 
crops  rotted  through  inability  to  take  them  to  market 
and  bad  crops  in  the  less  accessible  regions  meant 
famine.  Property  and  life  were  insecure. 

At  the  end  of  the  period,  in  1912-13,  imports  were  re- 
ported at  192,292,461  pesos,  exports  at  300,405,552. 
Railways  reached  the  more  important  producing  areas. 
Goods  formerly  unmarketable  went  to  parts  of  the 
country  where  they  were  needed  and  went  abroad  by 
thousands  and  tens  of  thousands  of  tons.  Property  was 


214,    MEXICO  AND  ITS  RECONSTRUCTION 

protected  and,  at  least  comparatively,  personal  liberty 
was  assured. 

The  change,  of  course,  was  not  due  to  any  one  new 
element  introduced  into  the  national  life.  It  was  the 
product  of  a  complex  of  influences,  which,  whatever  its 
shortcomings,  was  bringing  about  in  Mexico  a  trans- 
formation of  the  old  into  something  better.  Among 
these  influences,  on  the  whole  beneficent,  that  of  foreign 
commerce  was  constant  and  important.  It  operated 
both  as  cause  and  effect. 

The  growing  imports  gave  greater  resources  through 
customs  taxes  to  the  government.  They  stimulated  the 
people  to  new  wants,  and  brought  in  the  machinery  and 
raw  materials  for  new  industries  and  for  the  expansion 
of  old  ones.  They  made  possible  better  protection  of 
life  and  property  and  encouraged  the  investment  of 
capital,  both  foreign  and  national,  in  lines  that  would 
have  been  impractical  before. 

As  exports  expanded  new  areas  were  brought  under 
exploitation,  not  only  for  their  mineral  resources  but  for 
the  vegetable  and  animal  products.  The  exports,  in 
turn,  made  increase  of  imports  possible  and  gave  an 
aspiration  toward  a  standard  of  life  that  was  impossible 
before.  Few  influences,  indeed,  worked  more  clearly 
for  the  broadening  of  the  national  life  of  Mexico  than 
did  the  development  of  her  foreign  commerce.  Few 
seemed  to  carry,  to  a  greater  degree,  the  assurance  that 
the  industrial  development  of  the  country,  which  it 
helped  to  make  possible,  would  gradually  bring  about  a 
social  as  well  as  an  economic  reconstruction  and  assure 
in  the  republic  the  continuance,  by  less  arbitrary  means, 


RECENT  FOREIGN  COMMERCE       215 

of  the  orderly  development  that  had  been  maintained 
during  the  reign  of  President  Diaz. 

That  commerce  would  suffer  during  the  widespread 
disorders  brought  by  the  revolution  was  to  be  expected. 
The  actual  effects  of  the  local  conflict  are  obscured  in  its 
later  years  by  the  developments  of  the  World  War, 
which,  by  giving  a  great  stimulus  to  certain  lines  of  in- 
ternational trade,  distorted  the  trade  values  and  upset 
the  normal  conditions  in  a  number  of  important  lines 
of  Mexican  production,  notably  silver,  sisal,  and  petro- 
leum. As  a  result,  the  uncertainty  as  to  the  amount  of 
the  totals  of  the  trade  brought  by  the  early  years  of  the 
war  has  been  succeeded  by  uncertainty  as  to  what  the 
figures  mean,  now  that  some  published  by  the  Mexican 
government  again  become  available. 

The  most  contradictory  conclusions  are  arrived  at  by 
different  persons.  If,  for  example,  the  reports  of  crop 
production  are  considered  as  an  indication  of  commer- 
cial conditions,  the  picture  presented  even  for  1918,  the 
last  year  for  which  figures  are  available,  is  very  gloomy. 

These  returns  seem  to  show  a  very  serious  cutting 
down  of  the  production  of  the  staples  upon  which  the 
people  of  the  country  depend.  The  crop  decline  has 
affected  international  trade  le^s  than  might  be  expected, 
since  those  who  use  imported  goods  are  not  the  people  at 
large  and  the  chief  cereals  do  not  enter  foreign  com- 
merce in  large  amounts. 

If  the  returns  of  international  trade  and  of  customs 
collections  be  interpreted  as  those  in  control  of  the  gov- 
ernment allege  they  should  be,  Mexico  must  be  admitted 


216    MEXICO  AND  ITS  RECONSTRUCTION 


PRODUCTION    OF    CERTAIN    CROPS    IN    MEXICO  4 


Average  yearly 
production, 
1906-1910 
(Kilos) 

Production 
for 
1918 
(Kilos) 

31,033,637 

12,520,300 

445,396,850 

17,924,260 

3,219,624,240 

1,171,750,893 

Wheat  

306,782,890 

187,892,586 

163,397,200 

107,465,720 

60,535,620 

69,303,650 

22,936,645 

72,000 

20,069,642 

327,795 

56,251,716 

Dry  Chile    

9,809,031 

691,454 

2,257,144,953 

3,077,400 

105,887,340 

16,600,000 

74,546,666 

10,308,968 

Honey          

85,226,502 

6,628,980 

•  Cotton    

40,506,796 

79,292,700 

84,840,287 

158,066,682 

2,906,021 

2,500,000 

-'Coffee  

35,788,007 

47,582,540 

Vanilla   

188,005 

'Tobacco    

14,395,321 

12,608,337 

to  be  about  to  enter  a  period  of  prosperity  in  its  foreign 
trade  such  as  she  has  never  known.5 

*  Commerce  Reports,  September  27,  1919. 

B  The  statistics  in  the  following  paragraphs  are  taken  from  a 
summary  of  the  message  of  President  Carranza  published  in  the 
Statist,  London,  November  22,  1919,  p.  1121,  and  Commerce  Re- 
ports, December  3,  1918;  June  18,  1919;  and  October  17,  1919, 
quoting  reports  of  the  Mexican  government.  The  Presidential  ad- 


RECENT  FOREIGN  COMMERCE      217 

The  exports  for  the  year  1918  were  valued  at  367,- 
305,451,  compared  to  300,405,552  pesos,  the  record  for 
1912-13.  Imports  totaled  164,470,035  pesos,  still 
much  less  than  in  1910-11,  when  they  totaled  206,000,- 
000  pesos.  Detailed  returns  for  1918  and  subsequent 
years  have  not  been  published.  The  war  had  greatly 
emphasized  Mexico's  dependence  on  the  United  States 
in  her  foreign  trade.  Approximately  95  per  cent  of  all 
exports  in  1918  went  thither  and  about  90  per  cent  of 
the  imports  were  purchased  there. 

President  Carranza,  reviewing  the  state  of  the  coun- 
try in  his  message  to  the  Congress  in  the  autumn  of  1919, 
pointed  out  that  the  customs  receipts  for  1918  were  the 
greatest  in  history,  the  total  for  1918  being  over 
37,700,000  pesos,  or  six  million  greater  than  the  record 
of  the  best  years  of  the  old  regime.  The  striking  con- 
trasts between  the  reports  as  to  production  in  the  coun- 
try on  the  one  hand  and  the  figures  of  foreign  trade  and 
the  income  derived  therefrom  on  the  other,  are  due,  in 
large  degree,  to  circumstances  quite  independent  of  any 
action  taken  by  the  local  government.  The  fact  is  that 
the  apparent  prosperity  of  Mexican  foreign  trade  in 
1918  and  1919  was  due  not  to  what  the  revolutionary 
government  had  or  had  not  done  but  to  the  abnormal 
conditions  created  by  the  war  in  Europe. 

The  export  trade  of  1918  was  announced  as  of  a 
value  of  367,305,451  pesos,  as  compared  to  300,405,522 
pesos  in  1912-13;  while  that  of  1919  reached  424,462,471 

dress  of  C.  Adolfo  de  la  Huerta  published  in  Diario  Oficial,  Sep- 
tember 2,  1920,  gives  the  value  of  Mexican  exports  in  1919  as 
424,462,471  pesos  and  that  of  imports  as  265,178,706  pesos. 


218    MEXICO  AND  ITS  RECONSTRUCTION 

pesos.6  This  is  a  marked  gain  and  might  indicate  an 
encouraging  general  increase  of  commodity  shipments. 
A  detailed  comparison  to  determine  the  degree  to  which 
such  a  development  did  or  did  not  occur  is  not  possible 
with  the  statistics  at  hand.  It  seems  clear  from  an 
analysis  of  certain  items,  concerning  which  information 
is  available,  that  the  result  is  to  be  attributed  more  to  the 
general  high  level  of  prices  in  the  world's  markets  and 
the  unusual  circumstances  surrounding  certain  lines  of 
production  than  to  a  general  revival  of  commerce  in  the 
republic.  In  the  case  of  silver,  which  is  regularly  one  of 
the  most  important  of  Mexican  exports,  the  actual  pro- 
duction was  not  unusual.  The  yield  of  Mexican  silver 
mining  from  1907  to  1914  remained  practically  stable  at 
an  average  of  about  70,000,000  troy  ounces  per  year. 
The  next  two  years  saw  a  sharp  decline,  only  22,838,400 
ounces  being  produced  in  1916.  Thereafter  the  totals 
rose,  reaching  62,517,000  ounces  in  1918  and  about 
75,000,000  ounces  in  1919.  Meanwhile,  however,  the 
value  of  silver  per  ounce  had  very  greatly  increased. 
It  averaged  $.60835  United  States  currency  in  1912 
and  $.57791  in  1913  but  rose  to  $.96772  in  1918  and  to 
$1.11122  in  1919.  Had  silver  remained  at  near  its 
average  pre-war  level,  therefore,  or  had  it  been  at  the 
levels  it  has  since  reached,  the  value  of  that  portion  of 
Mexican  export  trade  would  have  shown  a  decline  as 
compared  to  1912-13. 

In  the  case  of  petroleum  a  remarkable  increase  of 
yield  has  occurred,  but  without  the  cooperation  or  en- 

*  Presidential  address  of  C.  Adolfo  de  la  Huerta,  Diario  Oficial, 
September  2,  1920,  p.  25  et  teq. 


RECEXT  FOREIGN  COMMERCE      219 

couragement  of  the  revolutionary  governments.  The 
total  production  in  1912  was  14,051,643  barrels;  in  1918 
it  was  63,828,327  barrels;  and  in  1919,  87,072,955  bar- 
rels. These  items  alone,  due  to  the  increased  value  per 
unit  in  the  one  case  and  to  the  increased  yield  in  the 
other,  brought  about  by  conditions  over  which  the  Mexi- 
can government  had  no  control,  explain  the  greater  part 
of  the  nominal  increase  in  the  value  of  Mexican  export 
trade  in  1918  and  1919  as  compared  with  1912. 

The  larger  customs  income  also  is  deceptive  since  it 
reflects  not  so  much  an  increased  volume  of  general 
trade  as  higher  rates  on  a  number  of  lines  of  imports. 
In  fact,  as  noted  above,  the  actual  value  of  imports  was 
considerably  less  in  1918  than  in  1910-11.  The  customs 
returns,  moreover,  include  the  yield  from  the  new  export 
taxes  on  petroleum  shipments. 

However  welcome  the  greater  money  values  of  ex- 
ports and  of  the  customs  income  is,  they  are  not  to  be 
taken,  therefore,  as  a  reflection  of  a  reestablished  ca- 
pacity for  production  in  the  country.  The  degree  to 
which  the  latter  has  come  about  can  be  better  judged  by 
the  way  in  which  Mexico  will  be  able  to  weather  the  de- 
flation of  the  values  of  all  her  export  commodities,  which 
has  set  in  after  the  war  boom.  For  this  period  no  statis- 
tics have  yet  been  published. 


CHAPTER  XVII 

COLONIZATION 

IT  is  hard  for  Americans,  who  have  seen  their  country 
welcome  immigration  of  European  stocks  and  prosper 
from  so  doing,  to  realize  that  other  states,  even  Ameri- 
can states,  have  not  uniformly  followed  the  same  policy. 

In  Mexico  an  illiberal  exclusive  policy  was  followed 
before  its  existence  as  an  independent  state.  Spain  first 
kept  foreigners  out  because  she  wished  to  keep  all  the 
benefits  of  local  resources  for  her  own  people  and  to 
keep  all  the  people  under  the  unquestioned  dominance  of 
Spanish  institutions.  Later  to  these  motives  was  added 
the  fear  that  to  abandon  that  policy  would  mean  to  open 
the  way  for  foreign  aggression. 

As  early  as  1602  the  attention  of  the  civil  and  ecclesi- 
astical authorities  was  called  to  "the  evils  resulting  from 
foreigners  going  to  the  Indies,  to  reside  in  the  ports  and 
other  places,  it  being  found  that  our  Catholic  faith  is  not 
secure,  and  it  being  important  to  see  that  no  errors  may 
be  sown  among  the  Indians  and  other  ignorant  persons.'* 
The  officers  were  commanded  to  "aid  in  cleansing  the 
land  of  these  people,  and  that  they  cause  them  to  be 
expelled  from  the  Indies."  1 

Twelve  years  later  even  trade  with  the  non-Spanish 
world  was  prohibited  to  the  colonies  "under  a  penalty  of 

Law  9,  Title  27,  Book  9,  Recopilacion  de  Indias,  Philip  III* 

220 


1 
1602. 


COLONIZATION  221 

death,  and  confiscation  of  the  property  of  those  who-vio- 
late  this  our  law." 

The  suspicion  of  foreigners  continued  a  part  of  Span- 
ish policy  to  the  end  of  the  colonial  period.  Mexican 
distrust  was  studiously  turned  against  the  then  weak 
United  States.  From  time  to  time  the  governors  "were 
admonished  to  keep  a  vigilant  eye  upon  the  restless  sons 
of  the  Northern  Republic."  When  New  Spain  threw 
off  the  yoke  of  the  mother  country  it  might  have  been 
expected  that  this  policy  would  be  reversed,  that  the 
foreigner  would  be  welcomed  and  that  a  rapprochement 
between  the  young  republics  of  North  America  would 
occur.  To  some  degree  this  did  happen.  Discrimi- 
natory legislation  was  repealed  and  the  laws  above  cited 
were  suspended  by  decree  of  October  7,  1823.3 

There  can  scarcely  be  said  to  have  been  an  established 
policy  on  international  affairs  in  Mexico  in  the  years 
following  the  winning  of  independence,  for  domestic 
problems  kept  her  statesmen  so  fully  occupied.  Toward 
foreigners  there  was  a  clearer  policy  than  on  most  lines. 
Those  in  power  realized  more  clearly,  it  appears,  than 
have  some  of  their  successors  that  the  foreigner  was 
essential  to  the  development  of  a  strong  Mexico.  Per- 
sons of  European  stocks  were  to  be  encouraged  to  settle 
in  the  republic.  It  was  believed  that  it  would  be  best  for 
the  central  government  to  deliver  over  to  the  states  the 
encouragement  of  immigration  since  each  would  be  anx- 

2  Law  7,  Title  27,  Book  9,  Recopilacion  de  Indias,  Philip  III, 
1614. 

3  This  reference  and  the  two  above  are  taken  from  Papers  Relat- 
ing to  Foreign  Relations  of  the  United  States,  1888,  vol.  2,  p.  1166. 


222    MEXICO  AND  ITS  RECONSTRUCTION 

ious  to  increase  its  population.  A  decree  to  that  end 
was  issued  in  1824.  The  only  limitation  was  that  lands 
20  leagues  from  the  frontier  or  10  leagues  from  the 
coast  could  not  be  colonized  by  foreigners  except  with 
the  permission  of  the  central  government. 

By  1831  at  least  two  colonization  projects  had  been 
launched.  The  legislature  of  the  state  of  Vera  Cruz 
gave  the  valley  of  the  Goazacualco  (Coatzacoalcos) 
River  to  a  French  company  which  sent  out  various  expe- 
ditions. These  enterprises  met  disaster.  The  colonists 
gradually  drifted  away  to  regions  better  developed  or 
back  to  the  home  land. 

The  other  venture  was  the  only  one  of  the  early  colo- 
nization contracts  that  was  successful.  It  was  from  the 
Mexican  point  of  view  also  the  most  disastrous,  for  it 
ultimately  brought  with  it  the  dismemberment  of  the 
republic.  This  was  the  colony  of  "Texas,  in  the  State  of 
Coahuila  and  Texas."  Under  the  colonization  contracts 
of  April  11,  1823,  6,391  families  had  entered  from  the 
northeast  by  January  2,  1830.  Others  "entered  without 
contract  and  without  the  knowledge  of  the  authorities," 
establishing  themselves  "at  their  will,  especially  near  the 
frontier."  Already  the  northern  colony  was  displaying 
some  features  that  were  the  cause  of  anxiety,  for  in  some 
of  the  settlements  "in  view  of  the  lack  of  adequate 
legislation,  the  customs  and  laws  of  the  country  from 
which  the  colonists  have  come  have  been  observed."  No 
advance  "worthy  of  notice"  had  at  this  time  been  made 
"in  the  territories  of  Mexico  and  California."  4 

*  Lucas  Alaman,  Memorla  de  relaciones,  January  5,  1831,  repub- 
lished  in  Vicente  E.  Manero,  Documentos  interesantes  soibre  coloni- 


COLONIZATION  223 

Later,  Mexico  attempted  to  redress  the  balance  by  in- 
viting "all  persons  of  the  Republic  to  colonize  in  Texas, 
offering  to  transport  them  at  the  expense  of  the  Treas- 
ury," to  give  them  tools,  and  to  maintain  them  for  the 
first  year,  but  the  proposal  did  not  attract  popular 
support.5 

General  colonization  schemes  continued  to  hold  the 
attention  of  the  government  in  spite  of  the  fear  of  what 
was  going  on  in  the  north.  Extraordinary  inducements 
were  offered  to  encourage  settlement  and  guarantees  of 
protection  for  person  and  property  were  freely  given.' 
The  general  policy  adopted  was  well  outlined  in  the  de- 
cree of  March  11,  1842,  issued  by  that  adventurer- 


zacion,  Mexico,  1878,  pp.  16-18,  and  Manuel  Siliceo,  First  Memorial 
of  the  Minister  of  Fomento,  February  16,  1857,  p.  43  et  seq.  See 
also  the  Memoria  of  Jose  Maria  Lafragua  to  the  Congress,  Decem- 
ber 14,  1846,  in  the  same  volume,  p.  22. 

6  Manuel  Siliceo,  op  cit.,  p.  43  et  seq.,  republished  in  part  in 
Manero,  op  cit.  This  report  explains  in  detail  the  failure  of  various 
colonization  schemes. 

6  In  Papers  Relating  to  Foreign  Relations  of  the  United  States, 
1888,  vol.  2,  p.  1167  et  seq.,  are  cited  the  following  decrees  grant- 
ing protection  to  foreigners  quoted  from  Legislation  Mexicana,  o 
tea  coleccion  completa  de  las  leyes,  decretos  y  circulares  que  se  han 
expedido  desde  la  consignation  de  la  indepeudencia.  This  volume 
contains  the  laws  in  force  at  the  time  of  publication  and,  therefore, 
does  not  show  all  the  legislation  which  had  been  passed  on  the 
subj  ect. 

Decree  of  October  7,  1823,  suspending  discriminations  of  the  laws 
of  the  Indies  against  foreigners. 

Law  of  Colonization  of  August  18,  1824. 

Decree  of  September  6,  1833,  for  protection  of  persons  and  prop- 
erty of  foreigners. 

Decree  of  March  11,  1842,  declared  still  in  force  January  30, 


224    MEXICO  AND  ITS  RECONSTRUCTION 

statesman,  President  Santa  Ana.    The  law  declares  that 
"after  mature  reflection  and  a  most  careful  examination 


1854,  allowing  acquisition  of  land   and  exemption   from   military 
service. 

Decree  of  October,  1842,  absence  of  a  foreign  owner  does  not 
cancel  title. 

Decree  of  June  16,  1856,  vessels  bringing  immigrants  for  colonies 
in  Vera  Cruz  not  subject  to  tonnage  duty. 

Decree  of  May  10,  1856,  establishment  of  certain  colonies  and 
tax  exemptions  therefor. 

Decree  of  November  15,  1858.  Though  civil  war  was  going  on 
the  government  will  not  tolerate  any  act  of  violence  against  for- 
eigners. They  are  to  be  held  exempt  from  all  military  service  and 
forced  loans.  "The  honor  and  good  name  of  the  Republic  and  the 
preservation  of  its  harmonious  relations  with  foreign  powers"  de- 
mand that  the  rights  of  foreigners  be  scrupulously  observed. 

Decree  of  March  13,  1861.  Exempting  from  taxation  for  five 
years  foreigners  who  purchase  lands  for  agricultural  purposes  or 
for  any  rural  industry.  Colonizing  companies  and  members  of  the 
colonies  granted  tax  exemption  for  ten  years.  Granting  additional 
tax  exemptions  for  five  years  to  foreigners  who  employ  Mexicans. 
Granting  freedom  from  customs  for  importations  of  goods  for  for- 
eign colonists  under  certain  conditions. 

Proclamation  of  the  Governor  of  Sinaloa,  January  2,  1862,  devot- 
ing one-half  of  the  vacant  land  and  waters  to  encouragement  of 
national  and  foreign  immigration.  Lands  to  be  given  freely  to 
colonists  who  will  survey  and  develop  them.  They  are  also  to  have 
freedom  from  military  service. 

Other  citations  are  found  in  Recopllacwn  de  las  leyes,  decretoS 
y  proclamaciones  de  la  union,  quoted  in  Papers  Relating  to  the  For- 
eign Relations  of  the  United  States,  1888,  vol.  2.  Among  which 
is  Circular  of  the  Secretary  of  Improvement,  Colonization,  Industry 
and  Commerce,  August  25,  1877.  It  cites  failure  of  former  legisla- 
tion to  attract  immigration  and  predicts  that  the  tide  will  now  turn 
toward  Mexico.  Peace  established  and  the  government  "is  resolved 
to  make  all  kinds  of  sacrifices  in  order  tx>  attract  honorable  and 
industrious  foreigners  to  our  favored  soil.  .  .  ." 


COLONIZATION  225 

relative  to  the  advantages  that  will  result  to  the  Repub- 
lic by  permitting  foreigners  to  acquire  property  therein" 
it  had  been  decided  that  "a  frank  policy  and  an  interest 
well  understood  demand  that  no  further  delay  be  per- 
mitted in  making  such  concessions  as  may  tend  to  the 
prosperity  and  development  of  the  Republic  by  the  in- 
crease of  population,  by  the  extension  and  division  of 
property  .  .  .  taking  also  into  consideration  the  fact 
that  by  these  measures  the  security  of  the  nation  will  be 
more  assured,  since  the  foreigners  who  are  owners  of 
property  .  .  .  will  be  so  many  defenders  of  the  national 
rights,  considering  also  the  encouragement  which  will  be 
received  by  agriculture,  commerce,  and  other  industries, 
which  are  the  fountains  of  public  wealth ;  and  lastly,  that 
the  opinion  generally  manifested  is  in  favor  of  the  con- 
cession," it  was  decreed  that  foreigners  could  acquire 
real  estate  freely  but  not  more  than  two  country  proper- 
ties in  the  same  department.  Foreigners  employed  in 
operation  of  such  properties  were  not  subject  to  mili- 
tary service  except  of  a  police  character.  Though  this 
decree  issued  from  the  central  government,  it  did  not 
overthrow  the  rule  that  colonization  projects  were  still  in 
the  hands  of  the  states. 

The  war  with  the  United  States  brought  to  those  in- 
terested in  colonization  a  conflict  of  feeling.  They  felt 
that  colonization  was  responsible  for  the  national  disas- 
ter, which  ended  with  the  loss  of  about  half  of  Mexico's 
territory,  yet  they  continued  to  believe  that  only  by  colo- 
nization could  the  republic  which  "found  itself  spread 
abroad  in  an  immense  territory  divided  by  high  moun- 
tains, by  great  rivers,  and  deserts,  which  could  not  be 


226    MEXICO  AND  ITS  RECONSTRUCTION 

crossed,"  hold  itself  together.  Its  misfortune  had  been 
the  result  of  its  impotence  and  of  the  fact  that  its  more 
remote  districts  "found  themselves  almost  foreign  .  .  . 
to  the  civilization  of  the  center  of  the  country."  For  a 
time  efforts  seem  to  have  been  confined  to  internal  colo- 
nization. Military  colonies  were  set  up,  especially  on  the 
northern  frontier  where  "invasions  by  adventurers  from 
Upper  California"  were  feared.  Thirty  of  these  out- 
posts were  established,  seven  in  Sonora,  seven  in  Chi- 
huahua, four  in  Nuevo  Leon,  six  in  Coahuila,  four  in 
Durango,  and  two  in  Lower  California.  But  the 
enemies  of  order  were  not  alone  in  the  north  and  similar 
establishments  had  to  be  set  up  in  Tehuantepec,  Quere- 
taro,  San  Luis  Potosi,  and  even  in  the  State  of  Mexico 
itself.  These  colonies  were  of  100  mounted  men  and 
their  families,  to  whom,  in  return  for  a  promise  to  stay 
in  the  colony  six  years,  the  government  gave  a  monthly 
salary,  land,  construction  materials,  laboring  tools,  and 
seeds  for  the  first  crop.7  The  settlements  were,  of 
course,  of  exceptional  character;  they  did  not  promise 
to  satisfy  the  country's  need  for  greater  population  nor 
the  desire  for  European  population.  Further,  the  set- 
tlements once  established  could  not  be  given  the  prom- 
ised support,  because  of  the  poverty  of  the  treasury.8 

How  real  was  the  Mexican  need  of  immigration  is 
shown  by  comparing  her  population  and  her  area.  The 
states  of  the  northern  frontier  were  possessed  but  in  no 

T  Manuel  Robles,  op  cit.,  republished  in  Manero,  op.  cit.,  p.  28 
et  teg. 

*  Memoria  of  the  Secretary  of  War,  Ignacio  Mejia,  1873,  pub- 
lished in  Manero,  op.  cit.,  p.  64. 


COLONIZATION  227 

true  sense  occupied.  Lower  California,  over  which 
neither  Spain  nor  Mexico  had  ever  had  effective  control, 
was  practically  without  inhabitants — it  had  about  one 
inhabitant  to  every  seven  square  miles.  The  character 
of  the  country  there,  it  is  true,  assured  that  it  would 
never  support  any  large  population.  The  frontier  units 
to  the  eastward  made  a  somewhat  better  showing.  So- 
nora  had  1.69  inhabitants  per  square  mile,  Tamaulipas 
on  the  Gulf  of  Mexico  had  3.07.  The  frontier  divisions, 
with  an  area  of  about  400,000  square  miles,  or  over  half 
of  that  of  the  republic,  had  a  population  of  less  than  a 
million,  and  that  population  lived  under  such  conditions 
that  its  rapid  increase  and  material  progress  were 
unlikely." 

Practically  a.  generation  after  state  promotion  of 
colonization  was  authorized  it  was  confessedly  a  failure. 
Colonists  were  unwilling  to  come  to  a  country  torn  by 
disorder.  The  state  governments  were  not  strong 
enough  to  carry  out  the  subsidies  they  promised.  The 
modifications  adopted  after  1824  were  not  acted  upon 
any  more  than  the  original  measure.  On  June  1, 1839,  a 
great  quantity  of  lands  was  marked  out,  which  was  to  be 
sold  for  payment  of  the  public  debt.  Seventeen  years 
later  not  a  single  conversion  had  been  made.  On  De- 
cember 4,  1846,  a  junta  of  distinguished  persons  was 
created  to  foster  colonization  but  nothing  was  done.  In 
32  years  following  1824  not  a  single  colony  had  been 
formed,  by  a  state,  of  individuals  who  had  come  from 

9  The  statistics  for  1861,  on  which  this  estimate  is  made  are,  at 
best,  only  approximately  correct.  They  are  taken  from  Carlos  But- 
terfield,  The  United  State*  and  Mexico,  Washington,  1861,  pp.  9-1 1. 


228    MEXICO  AND  ITS  RECONSTRUCTION 

outside  the  republic.  Lands  had  been  disposed  of  by  the 
states,  it  is  true;  they  sold  "concessions"  and  when  they 
could  not  do  so,  they  gave  them  away.  They  even  dis- 
regarded the  rule  against  alienation  to  foreigners  of  the 
lands  near  the  border  and  the  coast,  but  nothing  was 
done  "which  merits  the  name  of  colonization."  10 

State  colonization  had  proven  such  a  fiasco  that,  after 
examining  many  grants,  it  was  decided  to  annul  all 
acts  taken  under  the  legislation  that  established  the  sys- 
tem. On  November  25,  1853,  all  alienations  of  land 
since  1821  were  declared  void.  The  central  government 
now  tried  its  hand.  On  the  16th  of  February  of  the 
following  year  a  decree  was  issued  inviting  European 
immigration  and  offering  to  settlers  land  and  pecuniary 
aid.  President  Santa  Ana  then  appointed  a  Spaniard, 
General  Agent  of  Colonization,  to  whom  he  gave  nearly 
50,000  pesos  with  which  the  appointee  promptly  disap- 
peared. Other  contracts  were  made  in  1856  for  coloniz- 
ing Germans  in  Nuevo  Leon,  Jalapa,  and  Vera  Cruz 
and  the  consul  of  Genoa  contracted  to  bring  over  a 
colony  of  Sardinians.  Colonies  in  Sonora  and  Durango 
were  to  be  of  persons  from  Upper  California.  Others 
were  planned  in  Yucatan,  Chihuahua,  and  the  Federal 
District.  All  these  ventures  met  the  same  fate.  What 
the  states  had  not  been  able  to  do,  the  central  govern- 
ment did  no  better.  Ministers  of  Fomento,  or  the  In- 
terior, had  to  report  failure  after  failure.  Immigrants 
turned  aside  from  Mexico  to  the  northward.11 

10  Manuel  Siliceo,  op.  cit.,  in  Vicente  E.  Manero,  op.  cit.,  pp. 
47-50. 

11  Lists  of  colonization  enterprises  and  statements  of  their  troubles 


COLONIZATION  229 

The  next  serious  attempt  to  deal  with  the  colonization 
problem  was  made  in  the  '70s  by  the  eminent  Secretary 
of  Fomento,  Vicente  Riva  Palacio.  By  this  time  it  was 
realized  that  the  government  owed  it  to  the  public  treas- 
ury to  see  that  the  public  lands  were  not  carelessly  dis- 
posed of  to  companies  that  had  no  serious  purpose  to 
develop  them  or  to  promote  immigration.  It  was  recog- 
nized that  lands  that  had  been  alienated  could  not  be 
taken  again  without  payment,  but  the  government 
should  ascertain  what  land  it  held  and  in  the  future  dis- 
pose of  it  only  in  ways  that  would  fully  protect  the 
rights  of  the  nation.  On  August  25, 1877,  the  Secretary 
addressed  to  the  governors  of  the  states  a  circular  that 
indicated  both  the  problem  confronting  the  administra- 
tion and  how  ill  fitted  the  government  was  to  cope  with 
it.  Colonization  legislation,  it  was  shown,  still  proved  a 
failure;  colonization,  however,  was  one  of  the  greatest 
needs  of  the  country,12  but  the  government,  unlike  that 
of  the  republic  to  the  north,  had  no  way  of  telling  where 
public  land  lay  nor  what  was  its  extent. 

The  state  governors  were  asked  to  outline  the  system 
adopted  locally  to  handle  immigrants  on  their  arrival. 
They  were  asked  to  inform  the  central  government  what, 


in  later  years  are  found  in  Memorla  of  D.  Luis  Robles,  Minister  of 
Fomento,  1865,  and  Memorial  of  D.  Bias  Balcaral,  Minister  of 
Fomento,  1868,  published  in  Manero,  op.  cit.f  pp.  53-9. 

12  President  Diaz  in  his  address  to  Congress  declared  immigra- 
tion to  be  one  of  the  "imperious  necessities  of  the  republic,"  Paper* 
Relating  to  the  Foreign  Relations  of  the  United  States,  1878,  p. 
526,  quoting  the  address  of  President  Diaz  to  Congress  as  printed 
in  The  Two  Republics,  September  29,  1877. 


if  any,  lands  belonged  to  it  within  their  respective  com- 
monwealths, what  the  fertility  of  such  lands  might  be, 
and  what  would  be  a  fair  price.  In  short  the  govern- 
ment confessed  a  complete  "lack  of  knowledge  of  the 
whereabouts  of  the  national  lands,  due  to  the  fact  that 
they  are  not  explored  nor  surveyed."  Obviously  it  was 
"impossible  that  the  central  government  should  divide 
what  it  does  not  know  of  among  settlers." 

The  answers  received  were  disappointing.  There  was 
in  no  state  any  system  of  taking  care  of  immigrants 
worthy  the  name  and  the  state  governments  were  as  ig- 
norant of  where  the  national  lands  were  as  was  the  cen- 
tral government  itself.14  All  agreed  that  immigration  of 
foreigners  and  foreign  capital  were  needed  to  rouse 
Mexico  from  its  inactivity  but  none  had  succeeded  in 
attracting  either.  A  series  of  letters  to  the  agents  of 
Mexico  in  foreign  countries  brought  answers  not  more 
encouraging.  Their  general  tenor  was  that  Mexico 
could  not  hope  to  attract  immigration  so  long  as  the 
United  States  offered  lands  on  better  terms.  If  the 
country  put  its  house  in  order  and  could  point  out  defi- 
nite lands  that  would  be  given  to  foreigners,  some  might 
come.  Even  so,  many  would  not  come  to  Mexico  be- 
cause it  was  largely  a  tropical  country  and  in  the  opin- 
ion of  many  immigrants  wholly  so. 


18  Circular  of  Riva  Palacio  published  in  Manero,  op.  tit.,  pp. 
89-91. 

l*TEg  answers  are  published  in  detail  in  Anexo  Num.  3  a  la 
Memorla  'de  "hacienda  del  ano  economico,  de  1877  a  1878,  Estadls- 
tica  de  la  republica  Mexicana  .  .  .  Emiliano  Busto,  Mexico,  1880. 


COLONIZATION  231 

The  discouragement  then  felt  has  proved  to  be  justi- 
fied. The  government  has  continued  its  efforts,  but 
with  little  success.  Those  who  headed  the  numerous 
colonization  enterprises  of  the  period  often  received  a 
fixed  sum  plus  a  bonus  of  as  much  as  $35  or  $60  for  each 
immigrant  above  seven  years  of  age.  Additional  bo- 
nuses were  normally  forthcoming  for  the  establishment 
of  families.  One  contract  bound  the  government  to  pay 
$700  for  each  European  agriculturist  and  $350  for  each 
member  of  his  family  over  seven  years  of  age.  One 
stipulated  a  payment  of  $315,000  annually  for  30  years. 
The  colonization  contracts  granted  in  the  three  years 
1881-3  would  have  taken  from  the  treasury  $800,000  per 
annum  had  the  enterprises  been  successful.15  On  De- 
cember 15,  1883,  another  liberal  and  comprehensive  col- 
onization law  was  passed.  It  did  not,  however,  bring 
settlers. 

In  1892,  roughly  at  the  middle  of  the  Diaz  regime,  the 
Ministry  of  Hacienda  was  still  hopeful  that  conditions 
would  change.  It  was  declared  that  every  immigrant 
was  worth  10,000  pesos  to  the  country  and  that  soon  the 
long  looked-for  stream  of  colonists  was  sure  to  come. 
The  United  States  would  soon  fill  up,  "this  at  least 
within  the  period  of  a  few  years"  "and  then  the  current 
of  emigration,  until  now  directed  toward  them  will  have 
to  seek  a  new  field."  16  To  hasten  that  end  a  new  colo- 
nization law  was  adopted  on  March  26,  1894,  removing 

u  Papers  Relating  to  the  Foreign  Relations  of  the  United  States, 
1883-4,  p.  637. 

18  Memoria  de  hacienda  y  credito  publico  .  .  .  de  Julio  de  1891, 
ft  30  de  Junio  de  Mexico,  1892 f  p.  21  et  seq. 


232    MEXICO  AND  ITS  RECONSTRUCTION 

the  limit  of  2,500  hectares,  which  former  legislation  had 
allowed  to  be  granted  to  one  person.17 

As  time  went  on  free  land  could  no  longer  be  secured 
in  the  United  States,  order  was  established  in  Mexico, 
and  commerce  was  freed  from  its  former  limitations. 
These  circumstances,  which,  it  was  thought,  explained 
failure  of  immigrants  to  come  to  the  republic,  disap- 
peared but  settlers  did  not  turn  their  steps  southward. 
.  Foreign  capital  went  to  Mexico  and  with  it  the  man- 
agers who  would  supervise  the  industrial  undertakings, 
which  order  within  the  republic  made  possible.  But 
the  laborer  who,  by  performance  and  the  example  he 
would  give  the  native,  was  to  transform  its  entire  eco- 
nomic structure  did  not  come  in  great  numbers. 

A  few  scattered  colonies  have  come  into  existence 
that  have  had  some  prosperity.  The  Mormon  colonies 
in  the  northwest  are  the  most  important.  Two  Italian 
colonies  of  specially  chosen,  vigorous  men  are  reported 
to  be  prospering 18  and  there  are  groups  of  foreign  na- 
tionality in  other  parts  of  the  republic,  which  are,  how- 
ever, not  as  a  rule  "colonies"  in  the  sense  in  which  that 
word  has  been  used  in  Mexico.  In  fact  real  agricultural 
colonization  in  the  extensive  way  in  which  the  republic 
had  hoped  to  secure  it  has  never  had  a  single  example.19 

17  A  general  description  of  the  land  legislation  is  found  in  Charles 
H.  Stephan,  Le  Mexique  economique,  Paris,  1903,  pp.  221-242. 

18  Alberto  Robles  Gil,  Memorla  de  la  secretaria  de  fomento  pres- 
entada  al  congreso  de  la  union,  Mexico,  1913,  p.  94. 

19  The  hope  that  European  colonists  may  come  is  still  voiced.    It 
was  declared  fundamental  at  the  sessions  of  the  National  Chamber 
of  Commerce  of  Aguascalientes.     See  Circular  No.  98  in  Alberto 
Robles  Gil,  op  cit.t  p.  501  et  seq. 


COLONIZATION  233 

It  remains  true  to-day,  as  it  always  has  been  true,  that 
Mexico  is  a  land  in  which  Western  European  peoples 
can  succeed  as  colonists  only  under  the  most  exceptional 
conditions.  As  a  French  writer  of  the  beginning  of  the 
century  declares,  "If  you  have  no  money,  only  strong 
arms  and  good  habits,  do  not  come  to  Mexico  for  you 
will  find  in  competition  several  millions  of  Indian  la- 
borers who  have  arms  and  sufficiently  good  habits  for 
farm  work  and  who  are  satisfied  with  salaries  which 
would  make  your  condition  more  miserable  here  than  at 
home."  20 

After  the  early  '80s  there  was  a  small  but  increas- 
ing immigration  of  foreigners  into  Mexico,  not  as 
members  of  organized  colonies,  but  as  individuals  or 
members  of  groups  who  came  to  develop  some  of  the 
latent  industries.  The  most  numerous  of  these  immi- 
grants were  Spaniards  and  later  Americans.  Of  the 
latter,  the  immigration  before  the  railway  era  was  neg- 
ligible. Many  of  those  who  went  to  Mexico  failed  and 
had  to  ask  the  aid  of  charity  to  enable  them  to  return. 
The  people  who  went  to  Mexico  from  the  southern  states 
after  the  Civil  War  failed.  Those  who  did  not  die,  with 
few  exceptions,  came  back.  The  attempts  to  colonize 
Lower  California  from  the  United  States  failed  also. 

Nevertheless,  with  the  development  of  better  eco- 
nomic conditions  in  Mexico,  the  number  of  individual 
Americans  who  suceeded  in  making  homes  in  the  coun- 
try increased.  Some  were  those  whose  presence  was  no 
longer  welcomed  in  their  home  countries,  but  the  great 

20  Charles  H.  Stephen,  op  cit.,  p.  240. 


234    MEXICO  AND  ITS  RECONSTRUCTION 

majority  left  the  communities  they  abandoned  poorer 
by  their  absence.  They  were  a  forceful  and  adventur- 
ous contribution.  They  did  not  expect  and  they  did  not 
find  the  routine  sort  of  life  that  they  left  in  the  better 
settled  north.  They  did  not  go  to  Mexico  without  hope 
of  great  gains,  larger  gains,  at  least,  than  had  been  pos- 
sible in  the  countries  from  which  they  came.  For  this 
they  are  not  to  be  blamed — who  risks  fortune,  health, 
and  life  in  a  rough  and  ill-ordered  frontier  community 
unless  there  be  some  lodestone  of  opportunity  to  draw 
him  from  the  surroundings  among  which  he  was  born? 
They  were  promised  protection,  rights  such  as  were 
guaranteed  them  at  home,  in  a  new  land  where  oppor- 
tunities were  alluring.  They  accepted  the  new  life,  will- 
ing to  endure  its  privations,  as  a  return  for  its  oppor- 
tunities. That  they  received  the  sort  of  protection  they 
were  promised  and  expected  can  not  be  maintained. 
Buffeted  by  the  natural  disadvantages  of  the  frontier, 
their  enterprises  limited  by  the  ignorance  of  the  laborers 
upon  whom  they  had  to  rely,  and  too  often  harassed  by 
the  local  governments  whose  promises  had  been  their 
illusion,  their  lot  was  not  an  enviable  one.  That  they 
made  a  success  of  their  ventures  is  evidence  of  their  in- 
dividual capacity.  As  the  Diaz  regime  progressed  they 
were  given  better  protection  of  their  rights.  They  could 
look  forward  to  a  day  when  life  and  property  could  be 
enjoyed  under  conditions  of  safety  approaching  those 
of  the  land  they  had  left.  They  conferred  a  great  and 
too  often  unappreciated  boon  upon  the  republic  which 
was  their  host.  The  pioneers,  by  their  success,  won  in 
spite  of  repeated  disappointments  and  misfortune,  drew 


COLONIZATION  235 

other  foreigners  after  them.  The  stagnant  Mexican 
life  of  the  middle  century  was  stimulated  by  their  en- 
terprise. Foreign  capital  entered  new  fields,  into  which 
the  insufficient  and  timid  local  capital  would  not  ven- 
ture. The  foreigner  created  new  national  wealth,  which 
laid  the  foundation  for  greater  national  income  and  for 
a  government  that  might  in  time  have  approached  true 
republican  standards. 

Shrewd  was  the  discernment  of  the  Mexican  states- 
men who  saw  in  those  who  came  from  beyond  the  na- 
tional boundaries  the  salvation  of  their  backward  coun- 
try. What  they  failed  to  secure  by  means  of  "colonies" 
they  received  in  large  degree  by  the  coming  of  the  fear- 
less and  enterprising  individuals  who  entered  the  local 
life  to  transform  it.  Without  the  foreigner,  it  is  safe  to 
say,  Mexico  would  not  have  reached  for  generations  the 
condition  of  which  she  was  justly  proud  in  the  beginning 
of  the  century.  In  some  cases  Mexico  has  paid  heavily 
for  his  aid,  but  to  the  great  mass  of  foreigners  who  made 
her  lot  their  own  Mexico  owes  a  debt  of  gratitude  that 
she  cannot  repay. 

Nevertheless  neither  American  nor  any  other  foreign 
immigration  has  as  yet  helped  solve  the  greater  number 
of  the  fundamental  problems  that  Mexico  had  hoped 
would  be  settled  by  her  colonization  and  immigration 
legislation.  The  economic  basis  of  the  country  was  re- 
made but  the  native  population  was  not  leavened. 

If  foreign  laborers  will  not  come  to  give  impetus  by 
their  manual  skill  and  industry  to  the  national  life,  the 
onty  recourse  is  to  try  by  other  means  to  attain  the  same 
end.  Of  late  years  attention  has  been  turning  gradually 


236    MEXICO  AND  ITS  RECONSTRUCTION 

to  the  necessity  of  educating  the  Indian  in  industrial 
pursuits.  A  few  realized  this  necessity  a  generation 
ago.  In  1892  one  of  the  far-seeing  declared :  "The  duty 
of  the  government  is  to  civilize  these  co-citizens  of  ours 
...  to  place  them  in  contact  with  the  rest  of  the  coun- 
try and  with  the  civilized  world.  .  .  .  When  the  In- 
dians, up  to  the  present  time  disinherited,  are  subject  to 
the  advantages  and  comforts  of  civilization,  there  will 
have  been  accomplished,  so  to  speak,  the  transporting  to 
our  country  of  millions  of  colonists."  21  But  this  task 
the  men  of  the  old  regime  overlooked,  as  a  rule,  or,  if 
they  appreciated  it,  neglected.  It  was  the  greatest  fail- 
ure of  the  brilliant  exploit  which  Diaz  and  his  lieuten- 
ants accomplished.  They  brought  an  economic  trans- 
formation to  Mexico  but  they  left  its  social  structure 
very  much  as  they  found  it. 

This  is  the  most  important  task  of  the  government 
that  will  rise  out  of  the  Mexican  revolution — to  drive 
the  Indian  from  his  self-contented,  unprogressive  state 
of  few  desires  and  waken  him  to  new  economic,  political, 
and  social  opportunities  and  responsibilities.  If  Mex- 
ico is  to  be  for  the  Mexicans  in  any  real  way,  some  means 
of  bringing  this  change  must  be  found.  If  it  is  not 
found  and  the  Indian  proves  unable  to  respond  to  the 
new  conditions  now  rapidly  rising  around  him,  he  will 
become  the  hewer  of  wood  and  drawer  of  water  for  the 
white  man  who  comes  to  develop  the  natural  resources 
of  his  country,  or  he  will  be  crowded  gradually  into  the 
less  desirable  regions  of  his  native  land  where  his  ex- 

21  Memoria  de  hacienda  y  credito  publico  de  1  de  Julio  de  1891. 
a  30  de  Junlo  de  1892,  Mexico,  18Q2. 


COLONIZATION  237 

perience  will  parallel  that  of  the  native  tribes  in  the 
United  States.  Because  of  the  varied  climate  of  the 
country  it  is  not  unlikely  that  both  these  processes  may 
occur  in  different  portions  of  the  republic  at  the  same 
time. 

One  of  the  means  advocated  for  dealing  with  the  prob- 
lem of  awakening  the  ambitions  of  the  lower  class  Mex- 
ican is  so-called  internal  colonization.  Unlike  other  col- 
onization projects  this  movement  is  not  to  depend  on 
foreigners  nor  to  have  a  military  basis.  It  is  not  even 
necessarily  to  involve  transfer  of  persons  from  thickly 
settled  to  sparsely  settled  areas. 

Under  supervision  of  the  federal  government  it  is 
argued  there  should  be  maintained  a  comprehensive  sys- 
tem of  agricultural  education.  There  should  be  estab- 
lished in  various  parts  of  the  country  native  agricultural 
colonies  in  which  agricultural  experiment  work  would 
be  carried  on  by  the  younger  men.  To  each  would  be 
given  a  plot,  the  produce  of  which  would  be  his  own. 
The  government  would  stimulate  competition  by  grant- 
ing prizes.  Instruction  in  agricultural  methods  would 
be  given.  Allied  with  such  enterprises  could  go  legis- 
lation that  would  encourage  the  use  of  natives  in  the 
higher  positions  in  the  various  industrial  establishments, 
thus  making  the  economic  development  of  the  country 
contribute  directly  and  in  the  most  practical  way  to  the 
schooling  of  the  rising  generation.22  These  projects  aim 
to  assure  that  if  the  foreigner  himself  will  not  come  in 
the  way  the  governments  had  once  thought  possible, 

22  E.  Maqueo  Castellanos,  Algunos  problemas  nacionales,  Mexico, 
1909  (1910),  pp.  110-116  et  seq. 


238    MEXICO  AND  ITS  RECONSTRUCTION 

there  shall  at  least  be  brought  to  the  native  population 
the  benefit  of  the  enterprise  and  scientific  progress  of 
foreign  lands.  Of  such  "foreign  influence"  there  need 
be  no  fear  and  of  it  no  nation  can  have  too  much.  For 
the  prosperity  of  the  Mexican  and  for  that  of  the  inter- 
ests of  foreigners  in  the  republic  it  is  to  be  hoped  that  in- 
ternal colonization  may  have  the  fullest  success. 


CHAPTER  XVIII 

THE  FOREIGNER  IN  MEXICO:    HIS  PROPERTY 

IN  all  the  long  drawn  out  discussion  of  the  role  of  for- 
eign capital  in  Mexico  there  has  been  much  invective  on 
both  sides  and  on  both  sides  there  is  the  greatest  need 
of  clear  thinking.  Foreign  capital  is  pictured  as  was 
railway  development  a  generation  ago.  It  is  looked 
upon  as  carrying  a  possibility  of  the  overthrow  of  Mex- 
ican independence.  It  does  so.  Foreign  capital  at  the 
same  time  is  the  greatest  hope  for  the  salvation  of  the 
republic. 

It  is  doubtful  whether  Mexico  has  suffered  from  the 
so-called  "curse  of  concessions"  to  a  greater  degree  than 
the  average  undeveloped  country,  and  she  has  profited 
tremendously  by  the  cooperation  of  foreign  capital  se- 
cured by  favors  granted  in  order  to  induce  the  assump- 
tion of  her  unusual  business  risks. 

Mexico,  a  generation  ago,  was  in  a  condition  through 
which  many  a  country  has  passed.  She  had  a  great  ex- 
tent of  territory  and  a  sparse  population.  She  had  great 
natural  resources,  which  her  people  knew  not  how  to 
develop  and  which  they  could  not  have  developed  rap- 
idly even  if  they  had  known  how,  without  the  help  of 
capital  from  outside  the  country.  Under  these  condi- 
tions Mexico  did  what  other  countries  have  done  in  simi- 
lar circumstances.  Like  the  United  States,  like  Argen- 
tina, she  recognized  the  need  of  outside  help  and  she 

239 


240    MEXICO  AND  ITS  RECONSTRUCTION 

granted  special  favors  to  those  who  could  give  it.  That 
the  foreigner  was  disposed  to  drive  a  hard  bargain,  in 
some  cases,  is  true.  It  is  not  surprising  if,  in  some  cases, 
too  much  was  granted.  It  is  too  much  to  expect  that 
corruption  in  such  dealings  should  always  have  been  ab- 
sent. Certainly  the  experience  of  other  countries  does 
not  show  that  they  have  been  able  to  escape  such  pitfalls. 

The  last  quarter  of  the  nineteenth  century  was  one  in 
which  there  was  a  world-wide  demand  for  great  amounts 
of  capital  to  develop,  among  other  regions,  the  western 
United  States,  South  America,  Siberia,  and  South 
Africa,  as  well  as  to  carry  through  a  remarkable  indus- 
trial advance  in  both  Europe  and  America.  It  was  not 
to  be  expected  that  Mexico,  under  such  circumstances, 
could  secure  capital  upon  as  favorable  terms  as  might 
have  been  the  case  otherwise.  Taken  all  in  all  there 
seems  to  be  little  reason  to  believe  that  the  country  fared 
any  worse  in  this  matter — or  any  better — than  it  de- 
served or  than  other  countries  under  similar  circum- 
stances have  fared. 

What  the  "concessions"  involved  is  often  less  clear  in 
the  minds  of  critics  than  is  the  conviction  that  abuse  has 
occurred.  As  a  rule  the  pre-Diaz  concessions  have  little 
importance,  because  any  money  that  the  promoters  put 
into  them  they  lost  and  the  "concession"  lapsed  without 
benefit  to  the  grantee  nor  harm  to  Mexico.  There  were 
all  sorts  of  schemes  proposed  in  that  period.  Coloniza- 
tion enterprises  of  fantastic  nature  often  were  conces- 
sions and  some  of  the  grants  of  doubtful  character  in 
later  days  have  been  colonization  schemes. 

The  great  majority  of  the  concessions  were  simple 


FOREIGNERS'  PROPERTY  241 

grants  of  exemptions  from  taxes,  made  under  a  policy 
of  public  improvement.  The  central  government  and 
the  states  in  the  Diaz  regime  openly  declared  for  this 
method  of  development  and  there  was  then  no  local  or 
foreign  opinion  condemning  it.1  In  spite  of  the  wide- 
spread prejudice,  which  has  been  aroused  in  later  years 
against  any  such  contracts,  the  successors  of  Diaz  have 
indicated  a  belief  in  its  wisdom  by  holding  out  the  same 
sort  of  inducements. 

The  freedom  from  taxation,  which  was  the  sum  and 
substance  of  the  typical  concession,  was  an  encourage- 
ment given  to  industry  and  commerce,  a  favor  granted 
to  persons  who  would  establish  new  industries  in  the 
communities  or  open  up  a  new  national  resource.  The 
terms  of  many  of  the  contracts  in  the  states  were  long, 
running  up  to  25,  30,  and  even  50  years.  In  many  cases, 
doubtless,  these  did  represent  too  liberal  a  standard. 
Practically  any  sort  of  new  enterprise  could  secure  a 
grant.  The  list  of  the  concessions  in  the  various  states 
at  the  end  of  the  Diaz  regime  included  widely  contrasted 
enterprises  such  as  theaters,  fishing  companies,  ice  fac- 
tories, colonization  enterprises,  refining  plants,  flour 
mills,  banks,  liquor  shops,  and  clothes  factories.2 

What  amount  of  foreign  capital  has  actually  been  in- 
vested in  Mexico  it  is  impossible  to  determine.  Capital 

1  An  example  of  the  propagandist  literature  that  has  since  arisen 
criticizing  the  granting  of  concessions  is  C.  Fornaro  (and  others), 
Carranza  and  Mexico,  New  York,  1915. 

2  A  list  of  the  more  recent  concessions  granted  in  the  various 
states  giving  their  terms  is  published  in  Memoria  de  hacienda  y 
credito  publico,  correspondiente  al  ano  economico  de  1  de  Julio  de 
1910  a  30  de  Junio  de  1911,  Mexico,  1912,  p.  594. 


242    MEXICO  AND  ITS  RECONSTRUCTION 

is  never  prone  to  declare  its  existence  for  the  making 
of  public  records,  especially  in  countries  where  such  rec- 
ords may  be  made  the  basis  of  tax  collection  or  forced 
loans  during  periods  of  revolution.  That  the  valuations 
in  tax  assessments  are  in  most  countries  far  below  the 
actual  worth  of  property  is  notorious  and  Mexico  is  no 
exception.  On  the  other  hand,  whenever  interests  claim 
damages  from  their  own  or  from  foreign  governments, 
they  have  a  tendency  to  exaggerate  the  importance  of 
their  violated  property  rights  and  the  degree  of  per- 
secution endured.  To  a  less  extent  the  same  tendency 
to  overstatement  is  found  in  the  estimates  made  by  those 
who  describe  the  importance  of  their  co-citizens'  inter- 
ests in  foreign  lands. 

American  investments  in  Mexico  are  greater  than 
those  from  any  other  foreign  country.  The  estimates  of 
their  total  amount  are  many.  Two  coming  from  con- 
sular officers  of  the  United  States  have  a  semi-official 
character.  Neither  claims  to  be  complete  and  there  are 
points  in  which  each  is  subject  to  criticism  for  under- 
estimate and  overestimate  of  certain  items.  That  there 
is  less  probability  of  error  than  in  other  approximations 
is  indicated  by  the  detailed  information  they  contain. 

Consul  General  Barlow's  estimate  published  by  the 
Bureau  of  American  Republics  in  1904-5  indicated  that 
the  American  money  invested  in  Mexico  at  the  begin- 
ning of  the  century  by  1,117  American  companies  and 
individuals  was  about  $500,000,000  gold.  Practically 
all  of  it  had  been  introduced  in  the  previous  25  years 
and  about  half  of  it  in  the  five  years  preceding  the  re- 
port. The  greatest  single  American  interest  was  the 


FOREIGNERS'  PROPERTY  243 

railroads,  in  which  about  70  per  cent  of  the  investment 
was  American.  Of  the  railroads,  the  Mexican  Central 
had  the  most  American  capital,  followed  by  the  Mexican 
National.  In  mining,  Americans  had  invested  $80,- 
000,000,  in  agriculture,  $28,000,000.  In  manufacture, 
American  enterprise  had  already  begun  to  make  invest- 
ment in  sugar  refineries  in  Sinaloa,  in  various  enter- 
prises in  the  Federal  District  and  in  Nuevo  Leon,  espe- 
cially at  Monterey.  All  the  large  smelters  were  Amer- 
ican. 

The  announced  location  of  American  capital  in  Mex- 
ico at  this  time  is  unsatisfactory,  because  the  railroad 
investments  are  all  credited  to  the  city  in  which  their 
chief  offices  were  located.  In  Mexico  City,  thus,  there 
were  announced  to  be  American  investments  valued  at 
$320,800,000  and  in  Coahuila  American  properties 
worth  $48,700,000,  the  greater  part  in  each  case  repre- 
senting railroads.  Sonora  had  $37,500,000  worth  of 
American  capital  invested,  of  which  $27,800,000  was  at- 
tributed to  mining  ventures.  Of  the  $31,900,000  in 
Chihuahua,  $21,300,000  was  in  mining.  American  cap- 
ital in  Oaxaca  totaled  $13,600,000  and  in  Nuevo  Leon, 
$11,400,000.3 

Investments  continued  to  be  made  in  Mexico  at  a 
very  rapid  rate  during  the  years  following  this  report. 
Consul  General  Marion  Letcher  reported  statistics  in 
1912,  compiled  by  a  mining  engineer  of  long  residence 
in  Mexico,  that  indicated  $1,057,770,000  American  cap- 

8  House  Document  145,  Part  V,  58th  Congress,  3rd  Session 
(1904-5),  International  Bureau  of  the  American  Republics,  Mex- 
ico, pp.  257-259,  quoting  a  report  by  Consul  General  Barlow. 


244    MEXICO  AND  ITS  RECONSTRUCTION 

ital  invested  in  the  country.  The  greatest  single  Amer- 
ican interest  continued  to  be  in  the  railroads,  stocks  and 
bonds  of  which  were  held  to  a  value  of  $644,390,000. 
The  estimate  of  money  invested  in  mines  had  now  risen 
to  $223,000,000,  and  $15,000,000  or  more  was  credited 
to  each  of  the  following:  national  bonds,  smelters,  bank 
deposits,  rubber  production,  and  the  oil  industry.  Ob- 
viously, a  development  of  investments  on  so  large  a 
scale  was  helping  with  the  other  changes  in  local  condi- 
tions to  bind  the  economic  interests  of  the  two  countries 
together  very  rapidly  and  was  giving  an  unprecedented 
stimulus  to  Mexican  life.4 

Next  in  value  after  American  investments  this  com- 
pilation ranked  those  of  British  citizens.  The  total 
value  of  these  properties  was  $321,302,800.  The  chief 
items  were  railways,  national  bonds,  and  mines.  British 
citizens  were  stated  to  be  the  largest  foreign  holders  of 
national  bonds,  timber  lands,  and  tramways.  Invest- 
ments by  them,  like  those  by  Americans,  appear  to  have 
been  rapidly  increasing.  It  is  to  be  noted  that  in  these 
estimates  the  oil  properties  were  still  of  small  value  com- 
pared to  that  which  they  have  subsequently  reached. 

A  detailed  list  of  British  holdings  in  Mexico,  pub- 
lished in  1919,  put  the  total  at  more  than  $500,000,000 
American  gold.  The  amounts,  in  various  lines,  were  ap- 

*  Statistics  from  Daily  Consular  and  Trade  Reports,  July  18, 
1912,  p.  316.  The  estimates  are  reported  to  be  based  on  govern- 
ment and  state  reports,  directories  of  business  houses,  factories, 
mines,  and  smelters,  La  Mexique,  the  Mexican  year-book,  and  nu- 
merous reviews,  encyclopedias,  and  company  reports.  The  Statist 
(London),  November  29,  1919,  gave  "a  little  over  300  millions 
Sterling"  as  the  value  of  American  holdings. 


245 

proximately  as  follows:  petroleum  companies,  $120,- 
000,000;  mining  companies,  $85,000,000;  light,  power, 
and  street  railway  companies,  $145,000,000;  divers  in- 
dustries, $40,000,000;  and  banks,  $70,000,000.5  In  the 
same  year  another  writer  put  the  total  as  high  as  $800,- 
000,000  gold.6 

The  American  authority  above  cited  reported  French 
investments  in  1912  as  totaling  $143,446,000,  of  which 
national  bonds  and  bank  stocks  formed  almost  two- 
thirds.  Frenchmen  were  far  the  most  important  foreign 
investors  in  cotton  mills,  wholesale  stores,  and  tobacco 
factories. 

In  1914  French  residents  in  Mexico  claimed  that 
there  were  French  holdings  there  amounting  to  several 
thousand  million  francs  invested  in  government  obliga- 
tions, banks,  railways,  electric  transportation,  mills,  fac- 
tories, and  businesses  of  every  kind.  Among  the  more 
important  French  interests  were  mentioned  mines  such 
as  Dos  Estrellas  and  El  Boleo,  industrial  establishments 
such  as  the  Buen  Tono,  tobacco  factory,  the  chief  Ori- 
zaba textile  mills,  and  the  large  French  stores  in  vari- 
ous cities.7 

German  interest  in  Mexico  began  early.  In  the  Maxi- 
milian regime  a  colony  of  500  was  brought  from  Schles- 


5  Quoted  in  New  York  Times,  October  26,  1919?  from  an  article 
originally  appearing  in  El  Universal,  of  Mexico  City. 

6  South   American   Journal,   September    13,   1919.      The   Statist 
(London),  November  29,  1919,  gives  "between  200  and  250  millions 
sterling"  as  the  amount  of  British  interests. 

7  Unnamed  Paris  correspondent  in  the  Nation,  vol.  98,  p.  290, 
March  19, 


246    MEXICO  AND  ITS  RECONSTRUCTION 

wig-Holstein  to  Yucatan  but  the  venture  proved  a  fail- 
ure. The  few  who  remained  in  the  country  were  soon 
absorbed  into  the  local  population.  The  unfortunate  re- 
sults discouraged  further  colonization  en  masse  but  in 
later  years  Germans  have  come  individually  and  have 
adjusted  themselves  to  Mexican  conditions  with  suc- 
cess. German  writers  proclaim  Mexico  as  a  land  well 
suited  for  a  large  immigration.  There  the  colonist  lives 
the  national  life  without  losing  his  love  for  the  father- 
land, his  principles,  and  his  upbringing.  "Wherever  in 
the  world  there  are  a  hundred  Germans,  there  is  also  a 
German  school  with  the  task  of  teaching  within  its  walls 
the  holy  love  of  the  fatherland  and  the  fruitful  high  Ger- 
man kultur."  "In  traveling  through  these  wide  unpopu- 
lated districts  of  Mexico,  there  unconsciously  comes  to 
one  the  thought  of  the  great  density  of  population  at 
home  in  Germany,  where  people  are  packed  like  her- 
rings in  a  cask,  and  one  cannot  avoid  the  desire  to  take 
...  a  couple  of  millions  of  poor  beings  to  whom  light 
and  air  are  denied  over  there  and  .  .  .  put  them  down 
in  the  boundless,  fruitful  open  spaces  of  Mexico."  8 

No  detailed  analysis  of  German  investments  in  Mex- 
ico is  available.  A  writer  at  the  end  of  the  Diaz  regime 
estimated  the  total  working  capital  invested  at  the  equiv- 
alent of  $75,000,000.9  Germans  did  not  enter  largely 
into  the  industrial  development  of  Mexico,  except  in 
later  years  in  certain  mining  developments.  Mercan- 
tile development  showed  their  influence  to  a  greater  ex- 

8  Erich  Gunther,  Handbuch  von  Mexico,  Leipzig,  1912. 

9  See    Karl    Sapper,    Wirtschaftsgeographie    von   Mexico,    1908, 
for  a  discussion  of  German  interests  in  Mexico. 


FOREIGNERS'  PROPERTY  247 

tent.10  German  enterprise  was  represented  by  a  large 
number  of  wholesale  and  retail  dealers  in  hardware, 
chemicals,  and  small  commodities.  The  transactions  in 
these  lines  brought  them  into  closer  contact  with  the 
Mexican  public  than  any  other  class  of  foreigners  except 
the  Spaniards.  They,  like  the  Spaniards,  were  not  con- 
spicuous as  developers  of  the  great  natural  resources 
of  the  country  and  prejudice  against  them  seems  to 
have  been  less  than  against  any  other  foreign  element, 
especially  after  it  became  evident  that  the  United  States 
would  be  drawn  into  the  World  War  on  the  side  of  the 
Allies.  To  the  Germans,  too,  the  revolution  brought 
less  percentage  of  loss  than  to  the  Americans  and  Brit- 
ish. Mercantile  stocks  can  be  adjusted  to  changing  po- 
litical conditions  more  easily  than  can  public  services, 
mines,  and  similar  enterprises. 

What  the  total  amount  of  foreign  capital  in  Mexico 
is  and  what  is  its  relation  to  the  total  national  wealth 
must,  like  the  individual  items,  be  matters  of  estimate. 
The  American  consular  report  of  1912  put  the  total 
value  of  all  the  enumerated  properties  at  $2,432,000,000 
and  those  of  Mexican  ownership  at  $793,187,242.  It 
appears  that  the  comparison  must  understate  the  value 
of  Mexican  holdings.  An  article  published  by  a  former 
member  of  the  United  States  consular  service  at  the 
close  of  the  revolution  makes  an  estimate  of  $1,875,000,- 
000  as  the  total  foreign  investment  divided  as  follows: 
American,  $665,000,000;  British,  $670,000,000;  French, 

10  Anonymous  article,  "German  Efforts  in  Mexico,"  World's  Work, 
vol.  35,  p.  208,  December,  1917. 


248    MEXICO  AND  ITS  RECONSTRUCTION 

$285,000,000;  German,  $75,000,000;  and  various,  $190,- 
000,000." 

Whatever  the  total,  it  is  natural  that  foreign  coun- 
tries should  be  anxious  that  the  rights  of  their  citizens 
should  be  given  proper  protection.  It  is  also  natural 
that  Mexico  should  seek,  by  all  proper  means,  to  create 
conditions  by  which  she  can  gradually  make  herself  less 
dependent  on  capital  from  beyond  her  frontiers.  Un- 
fortunately, this  desire  has  not  at  all  times  been  accom- 
panied by  a  determination  to  respect  property  rights 
already  acquired. 

Envy  of  the  position  into  which  the  enterprise  of  the 
foreigner  had  carried  him  was  by  no  means  absent,  even 
before  the  revolution.  Mexico  has  welcomed  the  for- 
eigner as  the  means  of  her  salvation  but  she  has  been 
jealous  of  him  also.  She  has  wished  to  have  the  coun- 
try profit  by  his  individual  initiative  and  example  but, 
at  the  same  time,  she  has  wished  to  minimize  his  influ- 
ence in  the  republic,  and,  if  possible,  make  him  drop  his 
privileges  as  a  foreigner  and  become  subject  to  Mexican 
law  exclusively.  Mexico  has  welcomed  foreign  capital 
also,  but  she  has  sought  to  make  it  drop  its  nationality 
at  the  border.  She  has  wished  to  secure  its  cooperation 
as  capital,  not  as  foreign  capital.  Toward  both  capital 
and  the  immigrant,  in  short,  she  has  stood  in  an  equivocal 
position.  She  has  sought  the  benefits  they  could  bring 
without  being  willing  to  assume  the  responsibilities  that 
accompany  those  benefits. 

11  Quoted  in  the   Guaranty  News,   August   19,   1919,   Guaranty 
Trust  Company  of  New  York,  from  an  announcement  of  July  15, 
j  by  the  Mexican  International  Corporation. 


FOREIGNERS'  PROPERTY  249 

But  in  the  period  before  the  revolution,  Mexico  real- 
ized that  to  secure  foreign  cooperation  she  must  forego 
her  prejudices.  She  failed  to  denationalize  her  immi- 
grants. The  foreign  capital,  which  entered  her  great  de- 
velopment enterprises,  would  not  give  up  its  right  to 
look  to  the  home  country  when  justice  was  denied. 
Later,  when  capital  had  undertaken  certain  important 
developments  and  was  receiving  unusual  returns  for 
the  unusual  risk  assumed,  there  was  frequently  a  feel- 
ing that  the  special  privilege  granted  was  too  generous 
or  that  it  was  secured  from  a  government  under  duress 
or  by  corrupt  means.  But  in  the  Diaz  regime,  though 
there  were  protests,  the  government  stood  firm  for  the 
fulfillment  of  the  engagements  made. 

With  the  outbreak  of  the  revolution  it  is  not  surpris- 
ing to  find  that  the  new  political  leaders  took  advantage 
of  popular  discontent  with  the  results  of  the  policy  fol- 
lowed by  their  predecessors,  nor  is  it  surprising  to  find 
them  embarrassed  as  the  revolution  comes  to  a  close, 
when  they  are  now  brought  to  realize  that  the  promises 
made  to  their  followers  may  be  difficult  to  fulfill.  To 
declare  against  the  "curse  of  concessions"  and  to  secure 
supporters  at  home  and  abroad  for  a  campaign  to  free 
the  country  from  alleged  oppression  is  easy,  but  it  is 
difficult  to  justify  the  nation  in  trying  to  escape  from 
the  responsibility  of  paying  for  the  benefits  it  secured 
through  the  grants  against  which  complaint  is  made. 

In  individual  cases  it  is  often  difficult  to  determine 
whether  abuses  were  involved  in  the  original  conces- 
sions. There  are  few  who  would  defend  them  if  they 
are  shown  to  exist.  The  only  regret  is  that  even  such 


250    MEXICO  AND  ITS  RECONSTRUCTION 

cases  have  become  so  much  a  matter  of  history  that  ef- 
fective correction  is,  as  a  rule,  beyond  the  powers  of  the 
government,  whatever  its  good  intent  may  be.  In  the 
great  majority  of  cases,  too,  the  record  of  the  foreign  in- 
terest is  one  that  shows  property  rights  acquired  under 
the  conditions  laid  down  by  Mexican  law  and  involving 
privileges,  if  at  all  special,  only  of  a  kind  that  the  grant- 
ing government  was  not  only  willing,  but  anxious,  to 
give.  An  attack  upon  property  rights  of  this  nature  by 
Mexico  can  not  leave  the  foreign  powers,  whose  citizens' 
rights  are  involved,  without  concern. 

At  best  foreigners  have  endured  heavy  losses  during 
the  revolution.  No  country  can  suffer  from  a  far-reach- 
ing revolutionary  activity  for  a  decade  without  great 
damage  to  property  rights  of  all  sorts.  The  govern- 
ment that  finally  establishes  itself  assumes,  as  a  matter 
of  course,  the  duty  to  pay  all  proper  claims  arising  out 
of  the  hostilities.  It  is  not  only  this  responsibility  which 
is  under  discussion  in  connection  with  the  property  rights 
of  foreigners  in  Mexico  but  the  obligation  on  the  part 
of  the  republic  to  adopt  toward  undestroyed  foreign 
property  rights  a  policy  that  shall  not  amount  to  con- 
fiscation, and  that  shall  not  be  directed  against  foreign 
capital  merely  because  it  is  foreign,  irrespective  of  the 
conditions  under  which  the  interests  in  question  may 
have  joined  their  lot  to  that  of  the  republic. 

It  is  the  declarations  of  Mexican  leaders  and  the  leg- 
islation adopted  that  seems  to  offend  in  this  particular 
that  have  caused  the  greatest  doubt  in  the  mind  of  for- 
eigners and  their  governments  as  to  whether  they  can 
count  upon  justice  and  the  maintenance  of  standards  of 


FOREIGNERS'  PROPERTY  251 

international  friendship  by  the  governments  that  claim 
the  fruits  of  the  revolution.  President  Carranza  was 
quoted  as  saying:  "We  wish  foreign  capital  but  we  will 
not  give  one  special  privilege,  not  one."  What  such 
declarations  mean  is  not  clear,  either  from  the  use  of 
such  words  in  the  past  in  the  republic  nor  from  the  prac- 
tice of  those  who  now  use  them.  What  that  character- 
istic of  a  privilege  is  that  makes  it  special,  so  as  to  be  ob- 
jectionable, is  by  no  means  always  easy  to  determine. 
It  has  long  been  a  matter  of  dispute  in  the  interpretation 
of  constitutions  and  laws  in  the  United  States  and  else- 
where. 

Is  a  special  privilege,  as  that  word  is  used  in  discus- 
sions of  Mexican  affairs,  one  which  refers  to  an  exclu- 
sive right  to  certain  property?  That  can  hardly  be,  for 
upon  the  basis  of  individual  and  corporate  ownership 
of  property  all  modern  governments  rest.  If  a  privilege 
as  to  place  is  not  in  essence  special  and  objectionable, 
is  one  giving  rights  not  enjoyed  by  all,  over  a  certain 
time  or  in  regard  to  certain  property,  a  special  and  ob- 
jectionable privilege?  Is  exemption  from  taxation  for 
a  certain  period,  or  the  grant  of  public  land,  as  reward 
for  establishing  a  colony,  introducing  a  new  industry, 
or  undertaking  a  public  improvement  a  special  privilege 
not  to  be  endured  ?  Is  freedom  to  import  the  materials 
for  constructing  a  manufacturing  plant  or  a  railroad 
never  to  be  given  because  it  is  a  special  privilege?  In 
the  popular  sense  of  the  word  such  grants  are  undoubt- 
edly special,  but  that  such  privileges  may  operate  for 

12  World's  Work,  vol.  31,  p.  124,  1915. 


252    MEXICO  AND  ITS  RECONSTRUCTION 

the  public  good  has  been  accepted  generally  both  in  and 
out  of  Mexico  and  in  Mexico  such  grants  have  been  en- 
joyed by  both  Mexicans  and  foreigners  alike.  If  such 
be  the  privileges,  which  the  government  is  to  bring  to 
an  end,  and  if  the  policy  is  to  apply  only  to  future  de- 
velopments, foreign  capital  may  be  disappointed,  but 
there  can  be  no  valid  cause  of  complaint. 

But,  if  Mexico  is  free  to  encourage  or  discourage  for- 
eign capital  that  might  enter  the  country  to  develop 
property  within  it  by  granting  or  withholding  the  spe- 
cial privileges  above  mentioned,  she  is  not  free  to  adopt 
any  attitude  she  may  wish  toward  foreign  interests  al- 
ready established  within  her  borders.  Mexico  is  not  free 
to  denationalize  at  will  the  foreign  capital  which,  at  her 
invitation,  has  crossed  her  boundaries.  She  can  not  cap- 
tiously modify  the  contracts  which  she  has  herself  per- 
mitted and  encouraged  and  she  can  not  arbitrarily  de- 
nationalize her  resident  foreigners.13 

13  For  former  attempts,  see  Papers  Relating  to  the  Foreign  Rela- 
tions of  the  United  States,  1883-4,  pp.  651-4. 


CHAPTER  XIX 

THE  FOREIGNER  IN  MEXICO:    HIS  LEGAL  POSITION 

IT  has  been  said  already  that  it  does  not  seem  profit- 
able to  discuss  the  general  organization  of  the  govern- 
ment of  Mexico  under  the  constitution  of  1917  as  com- 
pared to  that  under  the  constitution  of  1857.  Constitu- 
tions have  never  been  a  set  rule  of  action  in  Mexico  and 
a  consideration  of  the  actual  conditions  within  the  re- 
public gives  little  hope  that  it  will  be  possible  to  make 
the  political  provisions  of  the  Constitution  of  1917  func- 
tion as  was  intended,  until  fundamental  changes  have 
been  accomplished  in  the  social,  educational,  and  eco- 
nomic equipment  of  the  people.  The  reconstruction  of 
Mexico  involves  problems  deeper  than  those  that  can 
be  settled  by  constitution  makers. 

It  is  important,  however,  to  consider  the  terms  of  the 
new  Constitution  applying  to  foreigners  and  their 
rights,  because  the  manner  of  the  enforcement  of  these 
has  an  immediate  bearing  on  Mexico's  relations  to  other 
powers  and  the  interpretation,  which  the  governments 
of  the  reconstruction  period  may  adopt  upon  these  mat- 
ters, will  determine  Mexico's  international  credit  and 
possibly  the  continuance  of  her  peaceful  relations  with 
other  nations.  In  short,  the  conditions  under  which 
Mexico  may  work  out  its  own  reconstruction  and 
whether  it  will  be  allowed  to  work  out  its  own  recon- 
struction may  depend  upon  its  willingness  to  assume 

253 


the  responsibilities  of  dealing  justly  with  those  of  other 
nationalities,  who  have  acquired  rights  within  its  bor- 
ders. 

This  is  not  wholly  or  chiefly  a  question  of  constitu- 
tions; it  is  more  a  question  of  the  attitude  of  the  gov- 
ernment in  the  interpretation  of  doubtful  clauses  of 
the  constitutions.  The  fundamental  law  of  1857  had  in 
it  objectionable  clauses  but  the  government  of  General 
Diaz,  as  time  went  on,  showed  itself  indisposed  to  in- 
terpret them  in  a  way  that  would  discriminate  against 
foreigners.  The  Constitution  of  1917  has  additional  in- 
definite provisions  and  the  governments  in  power  since 
its  adoption  have  acted  in  a  way  to  arouse  apprehension 
on  the  part  of  foreigners  owning  property  in  the  coun- 
try. 

The  preamble  of  the  new  Constitution,  like  that  of  the 
old,  contains  a  clause,  which,  broadly  interpreted,  would 
protect  all  vested  rights.  It  declares:  "No  law  shall 
be  given  retroactive  effect  to  the  prejudice  of  any  per- 
son whatsoever."  *  The  other  clauses  that  are  of  special 
interest  to  foreign  holders  of  property,  though  some  of 
them  do  carry  discriminations,  are  not  ones  to  which  in- 
ternational objection  may  be  raised  if  this  general  guar- 
antee is  in  law  and  practice  one  which  limits  all  other 
clauses.  If  it  does  not  do  so,  if  the  rule  that  a  more 
specific  provision  of  law  controls  a  more  general  one  ap- 
plies, then  certain  of  the  clauses  of  the  new  Constitution 
give  good  reason  for  alarm. 

1  Article  14.  The  citations  of  the  Mexican  Constitutions  in  this 
chapter  are  based  on  H.  N.  Branch,  The  Mexican  Constitution  of 
1917  Compared  with  the  Constitution  of  1857,  Philadelphia,  1917. 


FOREIGNERS'  LEGAL  STATUS       255 

Only  the  more  important  of  the  doubtful  clauses  can 
be  discussed  here.  As  to  landholding,  the  Constitution 
declares  that : 

Only  Mexicans  by  birth  or  naturalization  and  Mexican  com- 
panies have  the  right  to  acquire  ownership  in  lands,  waters, 
and  their  appurtenances  or  to  obtain  concessions  to  develop 
mines,  waters,  or  mineral  fuels  in  the  Republic  of  Mexico.  The 
nation  may  grant  the  same  right  to  foreigners,  provided  they 
agree  before  the  Department  of  Foreign  Affairs  to  be  consid- 
ered Mexicans  in  respect  to  such  property,  and  accordingly  not 
to  invoke  the  protection  of  their  Governments  in  respect  to  the 
same,  under  penalty,  in  case  of  breach,  of  forfeiture  to  the 
nation  of  property  so  acquired.2 

Mexico  doubtless  has  the  right  to  apply  the  rule 
stated  in  the  first  sentence  to  all  future  grants,  if  she 
wishes.  It  may  be  that  the  rule  would  be  considered  un- 
friendly by  other  nations  and  it  appears  beyond  doubt 
that  such  a  rule  would  check  the  development  of  the  re- 
public. Nevertheless,  there  is  no  obligation  on  nations 
to  be  either  friendly  or  progressive.  The  second  sen- 
tence is  more  objectionable.  It  would  be  more  straight- 
forward to  rely  on  the  unmodified  enforcement  of  the 
standard  expressed  in  the  first  sentence.  The  modifica- 
tion demands  that  an  individual  surrender  a  part  of  the 
rights  he  enjoys  under  international  law  as  the  condi- 
tion of  becoming  a  Mexican  landholder.  He  is  to  sur- 
render part  of  the  rights  regularly  attaching  to  his  status 
as  a  foreigner  though  he  does  not  consent  to  become  a 
Mexican.  There  is  good  reason  to  believe  that  many 
governments  would  consider  the  enforcement  of  such  a 

2  Article  27. 


256    MEXICO  AND  ITS  RECONSTRUCTION 

constitutional  provision  unquestionably  objectionable. 
Some  might  well  refuse  to  be  bound  by  such  surrender 
of  rights  by  their  citizens.3 

Legislation  restricting  the  ownership  by  foreigners  or 
certain  classes  of  foreigners,  of  land  within  border  and 
coast  zones,  has  long  standing  in  Mexico  as  is  shown 
elsewhere.  Such  restrictions  are  still  thought  advisable. 
They  are  found  in  the  Mining  Law,  which  went  into  ef- 
fect on  January  1,  1910,4  and  in  the  Constitution  of 
1917.  Generally  such  rules  have  been  ones  to  which 
the  executive  might  make  exceptions.  In  the  new  Con- 
stitution the  prohibition  is  absolute.  "Within  a  zone  of 
100  kilometers  from  the  frontiers,  and  of  50  kilometers 
from  the  sea  coast,  no  foreigner  shall  under  any  condi- 
tions acquire  direct  ownership  of  lands  and  waters." 
There  seems  no  doubt  that  Mexico  may,  if  it  wishes, 
adopt  such  a  rule  for  her  future  guidance. 

There  are  a  number  of  other  clauses  that  may  affect 
the  property  rights  of  foreigners,  the  interpretation  of 
which  is  doubtful,  such  as  those  providing  for  the  taking 
of  certain  properties  for  the  benefit  of  "rural  communi- 
ties," the  power  of  the  executive  to  declare  null  certain 

8  It  may  again  be  pointed  out  that  the  importance  of  this  and 
similar  provisions  depends  on  the  action  that  the  government  takes 
under  it.  Article  33  of  the  Constitution  of  1857  declared  that  for- 
eigners must  subject  "themselves  to  the  decisions  and  sentences  of 
the  tribunals,  and  shall  not  be  entitled  to  seek  other  redress  than 
that  which  the  laws  concede  to  Mexicans."  On  its  face  this  seems 
to  prohibit  appeal  to  the  home  country  but,  if  it  was  meant  to  do 
so,  the  government  did  not  enforce  the  provision. 

4  See  comment  in  Branch,  op  cit.,  p.  114. 

5  Article  27. 


FOREIGNERS'  LEGAL  STATUS       257 

contracts  and  concessions  granted  by  former  govern- 
ments, the  provisions  concerning  church  property,6  and 
those  concerning  exemptions  from  taxation.7 

The  equivocal  provisions  most  discussed  up  to  the 
present  time  have  been  those  referring  to  the  oil  re- 
sources of  the  republic.  This  has  been  true  for  a  num- 
ber of  reasons.  Oil  production  has  rapidly  increased 
and,  on  that  account,  has  attracted  attention.  The  Mex- 
ican oil  supply  was  important  in  the  World  War  and 
for  that  reason  was  watched  with  peculiar  interest  by 
partisans  of  both  the  allies  and  the  central  powers.  Fur- 
ther, the  leaders  of  the  government  in  Mexico  felt  they 
had  an  opportunity  to  secure  for  the  nation  a  great 
source  of  income  from  petroleum.  They  wanted  to  as- 
sure that  the  oil  resources  as  yet  undeveloped  should  be 
national  property,  they  wanted  to  tax  heavily  the  yield 
of  the  producing  areas,  and  they  showed  a  desire  to 
manipulate  the  legislation  affecting  these  areas  in  such 
a  way  that  the  government  would  have  freedom  from 
foreign  interference  in  any  measures  it  might  adopt  con- 
cerning the  properties. 

The  provisions  of  the  Constitution,  under  which  the 
controversy  has  arisen,  are  those  affecting  general  land- 
holding  and  a  special  paragraph  which  reads : 

In  the  nation  is  vested  direct  ownership  of  all  minerals  or 
substances  which  in  veins,  layers,  masses,  or  beds  constitute 
deposits  whose  nature  is  different  from  the  components  of  the 
land,  such  as  minerals  from  which  metals  and  metaloids  used 

6  Article  27,  II. 

7  Article  28. 


258    MEXICO  AND  ITS  RECONSTRUCTION 

for  industrial  purposes  are  extracted ;  beds  of  precious  stones, 
rock  salt,  and  salt  lakes  formed  directly  by  marine  waters, 
products  derived  from  the  decomposition  of  rocks,  when  their 
exploitation  requires  underground  work ;  phosphates,  which 
may  be  used  for  fertilizers ;  solid  mineral  fuels ;  petroleum  and 
all  hydrocarbons — solid,  liquid,  or  gaseous. 

It  is  later  provided  that  as  to  such  property  "the  own- 
ership of  the  Nation  is  inalienable"  and  that  concessions 
to  develop  these  resources  can  be  granted  "under  the 
laws  of  Mexico  only  on  condition  that  said  resources  be 
regularly  developed,  and  on  the  further  condition  that 
the  legal  provisions  be  observed."  There  are  a  num- 
ber of  reasons  why  this  new  constitutional  provision  is 
disturbing  to  owners  of  the  lands  affected  and  particu- 
larly to  foreign  owners.  The  nation  is  declared  the 
owner  of  the  property  described  and  this  ownership  is 
declared  inalienable.  Does  this  overthrow  any  previous 
ownership?  It  is  insisted  by  the  owners  of  oil  proper- 
ties that  the  rule  applying  to  petroleum  has  not  been  the 
same  as  that  applying,  for  example,  to  gold  and  silver. 
The  laws  of  1884,  1892,  and  1909  recognized  that  petro-, 
leum  in  the  subsoil  was  the  property  of  the  owner  of  the 
soil.  Relying  on  these  assurances  the  investments  in 
oil  properties  have  been  made.  To  enforce  a  claim  of 
national  ownership  of  petroleum  fields  now  would  be  to 
confiscate  the  property  purchased  or  at  least  its  most 

8  Article  27.  See  also  Frederic  R.  Kellogg,  "The  Mexican  Oil 
Problem,"  Nation,  October  5,  1918,  and  the  following  collec- 
tions of  documents  and  translations:  "The  Mexican  Oil  Question," 
n.  p.  n.  d.  (1919);  "The  Mexican  Oil  Controversy,"  n.  p.,  Octo- 
ber, 1920. 


FOREIGNERS'  LEGAL  STATUS       259 

valuable  part.  Such  an  act,  of  course,  would  be  con- 
trary to  the  letter  and  spirit  of  Article  14  on  retroactive 
legislation  already  quoted. 

Because  of  anxiety  as  to  the  meaning'of  this  provision 
Ambassador  Fletcher,  when  presenting  his  credentials 
to  the  Mexican  government,  made  inquiry  on  the  point. 
He  was  assured  that  no  confiscation  was  contemplated. 
The  Mexican  Review,  a  semi-official  paper  published  in 
Washington  in  the  interest  of  the  Carranza  government, 
declared  that  the  constitutional  provision  in  regard  to 
retroactive  legislation  protected  all  private  holdings  of 
lands. 

About  a  year  later — the  first  appearing,  February 
19,  1919 — a  series  of  decrees  were  issued,  which  seemed 
again  to  show  a  conflict  between  profession  and  intent. 
Certain  new  taxes  were  placed  on  the  petroleum  indus- 
try but  in  the  form  of  rentals  and  royalties.  Titles  to 
lands  were  to  be  registered  and  if  not  registered  under 
the  new  law,  the  lands  were  to  be  declared  open  to  entry. 
Ownership  could  be  perfected  only  under  the  condi- 
tions outlined  in  the  Constitution. 

But,  if  ownership  was  already  complete,  why  should 
any  payments  be  made  to  the  government  as  rental  or 
royalty?  Such  an  act  would  admit  that  the  real  owner- 
ship was  in  some  one  else — in  this  case  the  Mexican  gov- 
ernment. If  registry  under  the  new  law  was  more  than 
a  formality  for  the  completion  of  the  public  records,  it 
also  might  cloud  the  title  to  lands  in  full  possession. 
The  new  registry,  it  was  maintained,  would  in  itself  pass 
the  actual  title  to  the  government  or  at  least  put  the 
companies  within  the  terms  of  the  clause  of  the  Con- 


stitution  that  made  their  properties  Mexican  in  the  sense 
that  they  could  not  appeal  to  their  home  governments 
for  protection.  If  the  owners  refused  to  comply  with 
the  law,  their  properties  were  forfeited.  If  they  did 
comply  with  the  law,  the  result  was  the  same. 

Against  these  actions  by  the  Mexican  government,  the 
United  States,  Great  Britain,  Holland,  and  France  pro- 
tested. The  American  note,  dated  April  2,  1918,  de- 
clared that  the  Government  of  the  United  States  would 
not  object  to  fair  taxation  nor  to  taking  of  the  property 
of  its  citizens  for  true  public  use  if  proper  compensa- 
tion were  made,  but  it  could  not  "acquiesce  in  any  pro- 
cedure ostensibly  or  nominally  in  the  form  of  taxation  or 
the  exercise  of  eminent  domain,  but  really  resulting  in 
the  confiscation  of  private  property  and  arbitrary  de- 
privation of  vested  rights."  The  proposed  taxes,  in 
themselves,  were  so  heavy  as  to  indicate  a  trend  in  the 
direction  of  confiscation,  but  the  more  serious  question 
was  the  apparent  attempt  of  the  decree  to  separate  own- 
ership of  the  surface  from  ownership  of  the  petroleum 
resources  under  the  surface  of  the  land.  It  was  pointed 
out  that  the  taking  of  the  rights  in  question  would  be  ac- 
complished by  executive  action,  without  judicial  proc- 
ess and  apparently  without  any  proof  that  the  "separa- 
tion of  mineral  rights  from  surface  rights  is  a  matter  of 
public  utility  upon  which  the  right  of  expropriation  de- 
pends." The  note  concluded : 

In  the  absence  of  the  establishment  of  any  procedure  looking 
to  the  prevention  of  spoliation  of  American  citizens  and  in  the 
absence  of  any  assurance,  were  such  procedure  established,  that 
it  would  not  uphold  in  defiance  of  international  law  and  justice 


FOREIGNERS'  LEGAL  STATUS   261 

the  arbitrary  confiscations  of  Mexican  authorities,  it  becomes 
the  function  of  the  Government  of  the  United  States  most 
earnestly  and  respectfully  to  call  the  attention  of  the  Mexican 
Government  to  the  necessity  which  may  arise  to  impel  it  to 
protect  the  property  of  its  citizens  in  Mexico  divested  or  in- 
juriously affected  by  the  decree  above  cited. 

To  this  protest  no  answer  was  sent.  On  May  18,  how- 
ever, it  was  announced  that  the  decree  of  February  19 
would  not  take  effect  until  July  31,  1918.  On  July  8 
another  decree  postponed  action  until  August  15.  The 
United  States  again  protested,  and  on  August  14  Car- 
ranza  issued  another  decree  eliminating  the  necessity 
of  title  regulation.  The  "rentals  and  royalties"  provi- 
sion, however,  was  not  recalled  in  principle,  and  right  to 
possession  was  conditional  on  recognition  of  government 
ownership. 

What  the  position  of  the  property  owners  was  still 
remained  uncertain  when  the  attack  was  renewed  from 
another  direction.  A  drilling  license  for  working  oil 
properties  has  frequently  been  required  as  a  police  meas- 
ure. This  requirement  was  now  combined  with  other 
Mexican  legislation  for  use  for  a  broader  purpose.  The 
Constitution  declared  that  concessions  for  oil  develop- 
ment could  be  made  "only  on  condition  that  said  re- 
sources be  regularly  developed,  and  on  the  further  con- 
dition that  the  legal  provisions  be  observed."  The  sit- 
uation threatened  was:  Develop  your  lands  or  forfeit 
them.  You  cannot  develop  your  lands  without  a  drilling 
license.  The  license  will  be  granted  you  only  on  condi- 
tion that  you  recognize  the  standard  the  government 
imposes  as  a  condition  for  holding  and  operating  your 


262    MEXICO  AND  ITS  RECONSTRUCTION 

lands.  Obviously  this  might  be  used  as  a  means  to  dis- 
possess the  present  owners. 

Carranza,  meanwhile,  had  given  a  reply  to  the  protests 
of  foreign  powers  against  his  decrees,  denying  the  right 
of  complaint  and  declaring  that  if  foreigners  had  griev- 
ances, the  Mexican  courts  were  open  to  them.  The  oil 
interests  joined  in  taking  action  for  legal  protection 
under  Mexican  law.  The  Mexican  Congress  was  called 
to  consider  what  should  be  done.  Though  the  attitude 
of  the  government  was  officially  unchanged,  assurances 
were  received  in  May,  1919,  that  no  law  enacted  by  the 
Congress  in  the  proposed  petroleum  code  would  have 
retroactive  effect.  The  American  Department  of  State 
was  advised  that  the  new  oil  law  would  not  nationalize 
oil  properties  acquired  before  May  1,  1917.9 

This  assurance  seemed  to  indicate  that  the  road  was 
now  open  toward  an  amicable  adjustment  of  the  petro- 
leum difficulties,  but  subsequent  developments  did  not 
show  that  to  be  the  case.  The  various  notes  exchanged 
indicated  that  the  Mexican  government  still  sought  rec- 
ognition of  national  ownership  of  the  petroleum  re- 
sources. Direct  steps  to  this  end  having  been  declared 
unacceptable  by  the  United  States,  the  same  result  was 
sought  through  further  provisions  concerning  denounce- 
ments of  property,  taking  out  of  drilling  permits,  and 
decrees  concerning  the  so-called  Federal  Zone.10 

9  The  decrees  referred  to  above  were  discussed  in  various  issues 
of  the   Commercial   and  Financial   Chronicle,   New   York,   during 
1917-19. 

10  See  detail  of  this  correspondence  in  "The  Mexican  Oil  Con- 
troversy," n.  p.,  October,  1920. 


FOREIGNERS'  LEGAL  STATUS   263 

Later,  under  the  Obregon  government,  moves  against 
the  petroleum  interests  were  made  through  the  taxing 
power,  under  a  decree  to  become  effective  July  1,  1921. 
The  alleged  purposes  of  the  new  regulation  were  to 
stabilize  the  world's  oil  market,  to  conserve  the  national 
resources,  and  to  furnish  funds  with  which  the  govern- 
ment could  again  begin  payment  of  interest  on  the  na- 
tional debt.  The  rates  of  taxation  were  so  high  that 
they  were  alleged  to  be  confiscatory. 

As  the  negotiations  for  recognition  of  the  Obregon 
government  proceeded  this  question  became  bound  up 
with  the  older  controversy.  The  oil  producing  interests 
protested  to  the  United  States  government  that  recog- 
nition should  not  be  granted  unless  the  alleged  confis- 
catory  program  of  the  Mexican  government,  under 
whatever  guise  presented,  should  be  abandoned. 

On  June  7,  1921,  Secretary  of  State  Hughes  issued 
a  statement  outlining  the  fundamental  position  of  the 
United  States.  It  pointed  out  that  the  matter  at  issue 
was  much  more  important  than  the  question  of  the  rec- 
ognition of  any  particular  government  in  Mexico  and 
declared : " 

The  fundamental  question  which  confronts  the  Government 
of  the  United  States  in  considering  its  relations  with  Mexico  is 
the  safeguarding  of  property  rights  against  confiscation. 
Mexico  is  free  to  adopt  any  policy  which  she  pleases  with  re- 
spect to  her  public  lands,  but  she  is  not  free  to  destroy  without 
compensation  valid  titles  which  have  been  obtained  by  American 
citizens  under  Mexican  laws.  A  confiscatory  policy  strikes  not 
only  at  the  interests  of  particular  individuals,  but  at  the  founda- 

11  New  York  Times,  June  8,  1921. 


264    MEXICO  AND  ITS  RECONSTRUCTION 

tions  of  international  intercourse,  for  it  is  only  on  the  basis  of 
the  security  of  property,  validly  possessed  under  the  laws 
existing  at  the  time  of  its  acquisition,  that  commercial  transac- 
tions between  the  peoples  of  two  countries  and  the  conduct  of 
activities  in  helpful  cooperation  are  possible.  »  .  . 

This  question  is  vital  because  of  the  provisions  inserted  in 
the  Mexican  Constitution  promulgated  in  1917.  If  these  pro- 
visions are  to  be  put  into  effect  retroactively,  the  properties 
of  American  citizens  will  be  confiscated  on  a  great  scale.  This 
would  constitute  an  international  wrong  of  the  gravest  char- 
acter and  this  Government  could  not  submit  to  its  accomplish- 
ment. If  it  be  said  that  this  wrong  is  not  intended,  and  that 
the  Constitution  of  Mexico  of  1917  will  not  be  construed  to 
permit,  or  enforced  so  as  to  effect,  confiscation,  then  it  is  im- 
portant that  this  should  be  made  clear  by  guarantees  in  proper 
form.  The  provisions  of  the  Constitution  and  the  Executive 
decrees  which  have  been  formulated  with  confiscatory  purposes 
make  it  obviously  necessary  that  the  purposes  of  Mexico  should 
be  definitely  set  forth. 

The  oil  dispute  is  not  only  important  in  itself,  but  be- 
cause it  reveals  the  general  attitude  the  governments 
that  have  followed  the  revolution  have  shown  toward 
foreigners  and  foreign  capital.  The  provisions  concern- 
ing general  land  ownership  might  be  given  retroactive 
effect,  it  appears,  if  the  government  were  allowed  to 
establish  that  standard  as  to  any  other  sort  of  property. 
The  holding  of  land  might  he  made  conditional  on  the 
payment  of  taxes  in  the  forms  of  "rents"  and  "royal- 
ties." A  new  registry  law  might  be  framed  in  a  way 
to  cut  off  the  right  of  the  foreign  owner  to  appeal  to  his 
home  government  or  the  same  end  might  be  reached  by 
the  requirement  of  a  license  to  operate  the  land.  Manu- 
facturing enterprises  and  public  utilities  might  be  in- 


FOREIGNERS'  LEGAL  STATUS   265 

eluded  within  the  scope  of  similar  regulations,  all  form- 
ing a  part  of  a  comprehensive  "nationalization  pro- 
gram." 

In  fact,  if  the  Mexican  government  were  allowed  to 
enforce  retroactive  laws  affecting  certain  property  rights 
of  foreigners,  there  seems  to  be  no  reason  why  the  ap- 
plication could  not  be  logically  extended  to  the  entire 
field  of  their  privileges.  If  foreigners  could  be  required, 
as  an  arbitrary  condition  of  continuing  to  operate  their 
properties,  to  divorce  themselves  from  the  privilege  of 
appealing  to  their  own  governments  for  the  protection 
of  their  property  rights,  they  might  be  required  to  sur- 
render all  right  of  appeal  on  any  ground  in  return  for 
a  grant  of  the  same  privilege. 

The  Constitution  contains  still  another  clause  that 
seems  to  carry  the  possibility  of  abuse  in  relation  to  the 
personal  and  property  rights  of  foreigners,  though  it 
has  not  appeared  prominently  in  the  discussions  thus 
far  raised.  The  right  to  live  in  Mexico  is  subordinated 
to  the  powers  of  the  executive  "in  so  far  as  relates  to  the 
limitations  imposed  by  law  in  regard  to  emigration,  im- 
migration, and  the  public  health  of  the  country,  or  in  re- 
gard to  undesirable  foreigners  resident  in  the  coun- 
try," 12  and  "the  Executive  shall  have  the  exclusive  right 
to  expel  from  the  Republic  forthwith,  and  without  judi- 
cial process,  any  foreigner  whose  presence  he  may  deem 
inexpedient." 

Similar  clauses  are  not  unknown  in  the  legislation  of 
other  countries  and  the  exercise,  within  reasonable 

12  Article  11.  l3  Article  33. 


266    MEXICO  AND  ITS  RECONSTRUCTION 

limits,  of  such  a  right  is  not  properly  questioned.  If, 
however,  the  executive  should  undertake  in  pursuance  of 
an  anti-foreign  program,  to  make  continued  residence 
conditional  on  the  surrender  of  the  rights,  which  the  for- 
eigner enjoys  under  international  law,  such  action  could 
not  fail  to  arouse  protest  on  the  part  of  the  states  whose 
nationals  were  involved.  The  exercise  of  the  "exclu- 
sive" right  of  the  executive  to  expel  "without  judicial 
process"  any  resident  foreigner  whose  presence  in  the 
country  "he  may  deem  inexpedient"  or  "undesirable"  is 
one,  the  exercise  of  which  can  not  be  arbitrary.  If  it 
were  so,  the  property  and  personal  rights  of  those  whom 
Mexico  has  "virtually  invited  to  spend  their  wealth  and 
energy  within  its  borders"  l*  would  practically  be  beyond 
the  effective  protection  of  the  law.  No  self-respecting 
country  could  permit  itself  to  accept  such  a  standard. 

The  home  governments  of  all  foreigners  living  in 
Mexico  can  not  escape  the  responsibility  of  doing  all 
that  is  allowed  under  international  law  to  assure  that 
their  rights  in  the  republic  shall  be  recognized  and  pre- 
served. The  law  under  which  they  live  must  be  one  that 
establishes  equitable  standards,  not  one  which,  while 
having  regularity  of  form,  denies  them  the  substance  of 
their  rights.  Broadly  considered  the  firm  insistence  on 
such  a  standard  is  not  a  policy  lacking  in  friendliness 
for  Mexico.  To  fail  to  insist  on  such  treatment  for  for- 
eigners would  be  to  encourage  the  creation  of  conditions 
in  Mexico  that  would  bring  with  them  a  serious  menace 
to  its  independence. 

14  The  words  quoted  are  in  the  American  note  of  April  2,  IQIS. 


FOREIGNERS'  LEGAL  STATUS   267 

At  bottom,  of  course,  the  protection  of  the  lives  of  its 
citizens  is  one  of  the  first  duties  of  every  state,  a  duty 
that  does  not  cease  at  the  boundary.  Abroad  protec- 
tion should  be  given  not  only  in  normal  times,  when,  in 
fact,  it  will  seldom  be  necessary  to  call  for  it,  but,  so  far 
as  circumstances  permit,  during  periods  when  the  coun- 
tries to  which  the  citizens  have  gone  to  live  are  suffer- 
ing invasion  or  are  torn  by  civil  war.  The  outrages  prac- 
ticed on  the  local  population  may  arouse  active  sym- 
pathy abroad,  resulting  in  extreme  cases  in  intervention 
by  the  foreign  government  in  defense  of  the  interests  of 
general  humanity,  but  long  before  that  point  is  reached 
a  country  must  feel  the  call  to  protect  its  own  citizens 
resident  in  foreign  lands,  when  their  rights  are  violated. 

It  can  not  be  claimed,  of  course,  that  as  soon  as  public 
order  is  disturbed  in  a  country  foreign  governments 
have  a  right  at  once  to  resort  to  armed  intervention  to 
protect  their  citizens,  but  in  every  case  it  is  a  national 
duty  to  make  all  governments  and  all  parties  to  conflicts 
within  them  understand  that  prompt  and  full  reparation 
for  wrongful  damages  will  be  expected.  Up  to  what 
point  protest  and  redress  can  properly  be  relied  upon, 
and  when  more  forceful  measures  must  be  resorted  to 
can  be  determined  by  no  definite  rule.  The  character 
of  the  disturbed  populations,  the  nature  of  the  viola- 
tions, their  long  continuance,  the  prospect  of  early  ad- 
justment of  public  order,  and  an  indefinite  number  of 
political  considerations  all  influence  the  decisions  that 
will  be  taken.  No  country  is  under  the  obligation  to 
allow  the  abuses  to  continue  indefinitely.  At  some  point 
the  duty  to  respect  technical  foreign  sovereignty  be- 


268    MEXICO  AND  ITS  RECONSTRUCTION 

comes  less  insistent  than  the  duty  to  defend  the  rights  of 
the  home  government  and  its  citizens. 

In  the  opinion  of  large  numbers  of  people  who  have 
watched  developments  in  Mexico  during  the  revolution 
the  time  has  long  passed  when  foreign  countries  should 
content  themselves  with  protests.  The  stronger  foreign 
governments,  during  much  of  the  period  of  the  revolu- 
tion, have  had  their  attentions  and  energies  occupied 
elsewhere.  On  other  occasions  they  have  frequently 
shown  themselves  unwilling  to  act  when  the  steps  they 
might  take  against  a  weak  state  could  be  attributed  to 
selfish  interests.  It  can  not  fail  to  be  clear,  however, 
that  with  the  cessation  of  the  larger  hostilities  in  Europe 
and  the  continuance  of  chaotic  conditions  in  Mexico  the 
demand  for  the  respect  of  human  rights  in  Mexico  will 
become  more  insistent. 

What  the  actual  situation  of  the  foreigner  is  in  Mex- 
ico, it  is  hard  to  state  in  a  comprehensive  way.  Reports 
are  contradictory  and  incomplete.  The  majority  of 
those  foreigners  who  lived  in  the  republic  ten  years  ago 
have  probably  left  the  country.  There  is  no  doubt,  how- 
ever, that  the  experiences  they  have  endured  during  the 
past  decade  have  been  harrowing  in  many  cases,  and 
ones  which  in  other  times  and  circumstances  would  have 
brought  foreign  intervention. 

The  sufferings  of  American  residents  have  been 
greater  than  those  of  other  foreign  colonies  because 
Americans  have  been  present  in  larger  numbers;  they 
have  been  residents,  to  a  large  degree,  of  the  more  dis- 
turbed regions  and,  at  least  in  some  instances,  they  have 
been  the  subject  of  a  particular  dislike.  Nevertheless, 


FOREIGNERS'  LEGAL  STATUS   269 

what  has  happened  in  their  cases  may  be  cited  as  an  illus- 
tration of  the  sorts  of  wrongs  that  many  foreigners  have 
had  to  endure. 

The  list  is  too  long  to  be  recounted  at  length.  Its 
details  are  often  of  too  refined  a  brutality  to  allow  pub- 
lic discussion.  They  are  eloquent  testimony  that  a  gov- 
ernment that  was  unable  to  stop  the  mounting  total  of 
crimes  within  its  territory  for  practically  a  decade,  let 
a  large  part  of  its  people  get  out  of  hand  and  was  appar- 
ently unable  to  reduce  them  to  control.  The  details 
of  what  happened  in  the  country  are  portrayed  in  let- 
ters, telegrams,  memorials,  and  records  of  personal  expe- 
rience, speeches  presented  in  Congress  and  testimony 
before  Congressional  committees.  The  record  is  revolt- 
ing. As  reported  to  the  Congress  of  the  United  States, 
it  includes  robbery,  extortion,  holding  for  ransom, 
plunder,  burning  of  property  without  cause,  murder  by 
various  means,  including  throat-cutting,  disemboweling, 
beheading,  and  mutilation.  It  includes  forcing  severely 
wounded  women  to  cook  for  soldiers,  and  outrage  of 
wives  and  children  in  the  presence  of  wounded  or  bound 
husbands  and  parents.15 

Nor  is  it  to  be  supposed  that  the  wrongs  against  for- 

15  See,  for  speeches  detailing  wrongs  of  the  sorts  cited,  Congres- 
sional Record,  vol.  51,  part  4,  p.  3743,  February  21,  1914,  and 
part  5,  p.  4512,  March  9,  1914.  Detailed  testimony  concerning  con- 
ditions in  Mexico  as  they  affect  the  rights  of  foreigners  is  published 
in  Investigation  of  Mexican  Affairs,  Hearing  before  a  Sub-commit- 
tee of  the  Committee  on  Foreign  Relations,  United  States  Senate, 
66th  Congress,  1st  Session,  pursuant  to  S.  Res.  106,  parts  1-3,  pp. 
1-677.  The  violation  of  personal  rights  is  discussed,  especially  at 
pages  370-402. 


270    MEXICO  AND  ITS  RECONSTRUCTION 

eigners  have  been  confined  to  the  earlier  period  of  the 
revolution  and  were  a  result  only  of  the  first  flush  of 
passion  which  the  conflict  aroused.  On  the  contrary, 
the  list  of  American  citizens  killed  in  Mexico  between 
1911  and  the  middle  of  1919,  published  by  the  Depart- 
ment of  State  in  response  to  an  inquiry  by  the  United 
States  Senate,  shows  a  series  of  rising  totals.18  Henry 
Fletcher,  American  Ambassador  to  Mexico,  testified  in 
August,  1919,  that  during  1918  and  1919,  51  Americans 
had  been  killed  in  Mexico.  During  that  time  he  had 
not  been  informed  of  one  prosecution  by  the  Mexican 
government  for  these  crimes." 

No  fair-minded  person  believes  that  such  acts  are 
attributable  to  the  better  class  of  Mexican  citizens  or 
that  they  condone  such  abuses.  They  deplore  them  as 
much  as  do  any  civilized  people.  But  no  government 
can  escape  the  responsibility  for  allowing  conditions  to 
continue  indefinitely  under  which  such  crimes  can  occur, 
and  upon  the  best  citizens  of  Mexico  falls  the  duty  to 
join  hands  to  bring  their  fatherland  again  into  the  con- 
trol of  those  who  can  maintain  public  order  within  its 
territory.  Upon  their  rising  to  that  high  opportunity 
may  depend  the  future  of  independent  Mexico. 

16  "Claims  Against  Mexico,"  Senate  Document  67,  66th  Congress, 
1st  Session,  July  31,  1919. 


17 


The  Independent,  August  9,  1919,  p.  172. 


CHAPTER  XX 

THE  TROUBLESOME  BORDER 

*VHEN  one  American  speaks  to  another  of  "the  bor- 
der," there  is  no  doubt  what  border  is  meant.  When 
the  frontier  problem  is  under  discussion,  it  is  always  the 
Mexican  frontier.  There  is  no  Canadian  border  in  the 
sense  in  which  there  is  a  Mexican  border;  on  that  side 
there  is  a  boundary  line,  but  it  has  no  problems.  As 
an  artificial  barrier  to  free  passage  of  trade  it  is  trouble- 
some to  individuals  on  both  sides  of  the  line  and  looked 
upon  as  a  necessary  nuisance.  It  is  not  an  imaginary 
wall  separating  two  clashing  sets  of  national  interests, 
a  protection  against  the  aggressions  of  a  suspected 
neighbor  before  whose  courts  a  man  from  beyond  the 
boundary  is  not  de  facto  equal  before  the  law. 

Why  is  it  that  our  southern  boundary  has  been  and 
is  a  problem,  a  "frontier"  with  all  the  sinister  connota- 
tions of  the  word,  while  our  northern  boundary  is  not? 
The  answer  touches  many  of  the  reasons  for  the  lack  of 
good  understanding  between  America  and  its  southern 
neighbor. 

The  ill-feeling  along  the  frontier  is  partly  explained 
by  history;  it  is  the  survival  of  the  hate  aroused  by  the 
Mexican  War,  but  this  is,  at  most,  only  the  capstone  of 
a  group  of  elements,  the  one  that  claims  first  attention 
and  lives  longest  in  the  memory,  without  being  the  most 
fundamental.  Educated  Mexicans  still  avoid  reference 

271 


272    MEXICO  AND  ITS  RECONSTRUCTION 

to  "  '49"  or  discuss  it  as  a  year,  the  events  of  which  are 
a  source  of  national  grief  and  a  warning  of  what  may 
again  be  expected.  The  agents  of  Germany  in  the 
World  War  thought  the  feeling  still  of  sufficient  potency 
to  justify  holding  out  before  Mexico  the  possibility  of 
a  revanche.  It  may  be  doubted  whether  this  sentiment 
runs  as  deeply  as  some  would  have  us  believe.  Mexico 
does  remember  that  the  United  States  was  her  enemy 
in  the  middle  of  the  nineteenth  century,  more  keenly 
than  she  remembers  the  service  rendered  her  by  the  same 
nation  some  two  decades  later,  but  she  would  not  do  so 
if  there  were  not  other  elements  contributing  to  her 
regret  for  losing  the  little-settled  and  less-governed  wil- 
derness that  she  lost  in  her  war  with  the  United  States. 

The  underlying  causes  of  Mexican- American  distrust 
fall  into  three  overlapping  groups — human,  physical, 
and  governmental.  Of  the  first  the  most  important  is 
the  contrast  of  race.  The  attitude  of  the  people  of  the 
United  States  toward  the  less-developed  races  has  never 
been  a  friendly  one.  It  has  lacked  the  tolerance  which 
the  British  have  developed  for  the  peoples  with  whom 
they  have  come  into  contact. 

The  problem  has  been  more  difficult  in  America,  be- 
cause it  has  been  a  closer  one.  Except  in  the  Philip- 
pines, the  less-developed  peoples  with  whom  the  United 
States  has  had  to  deal  have  been  within  its  body  politic 
or  upon  its  edges.  There  has  not  been  any  clear-cut 
class  distinction,  recognized  by  both  sides,  such  as  has 
established  the  relation  of  "superior"  and  "inferior"  in 
most  of  the  cases  where  Anglo-Saxon  populations  have 
come  into  contact  with  non-Europeans  outside  of  Amer- 


ica.  Those  who  have  come  into  contact  with  Mexican 
civilization  along  the  border,  too,  have  been,  to  a  large 
extent,  that  portion  of  the  American  people  who  have 
had  closest  contact  with  the  negro  population  of  the 
republic  and  regard  them,  and  to  hardly  a  less  degree 
any  colored  or  mixed  blood  people,  as  unquestionably 
inferior.  To  the  Mexican  this  attitude  is  a  constant 
irritation. 

Contrast  in  language  and  civilization  accentuates 
frontier  problems.  On  our  northern  boundary  there 
is  neither.  Immigrants  pass  in  both  directions  hardly 
conscious  that  the  boundary  exists.  The  flowing  into 
Canada  of  an  agricultural  population  from  the  United 
States  occurred  without  clash.  A  similar  movement 
could  not  take  place  from  the  United  States  to  Mexico. 
To  be  sure,  there  is  a  border  belt  in  which  there  is  a 
population  to  some  degree  bi-lingual  and  large  numbers 
of  Mexicans,  especially  since  the  revolution,  have  sought 
an  opportunity  for  a  more  secure  livelihood  across  the 
border.  But  the  average  Mexican  in  the  United  States 
remains  a  foreigner  in  habits  of  life.  For  him,  on  ac- 
count of  a  combination  of  elements  including  race,  lack 
of  education,  and  lack  of  resources,  it  is  hard  to  become 
a  part  of  the  life  of  the  new  community  in  which  he 
finds  himself.  In  many  cases  he  does  not  wish  to  do  so. 

Americans  of  the  border  states  of  Mexico  also  seldom 
identify  themselves  with  the  local  life.  They  keep  their 
American  citizenship;  they  may  be  engaged  in  the  ex- 
ploitation of  mines,  lumber,  or  other  natural  resources, 
but  they  are  representative  of  a  "foreign  interest." 
Even  though  they  become  landowners,  they  continue  to 


274s    MEXICO  AND  ITS  RECONSTRUCTION 

look  upon  themselves  as  foreigners  and  to  be  looked 
upon  as  foreigners  by  the  native  population. 

It  is  common  to  hear  Americans  speak  of  the  United 
States  as  the  melting  pot.  They  are  proud  of  the  adapt- 
ability of  the  American.  They  take  a  certain  pride  in 
the  easy  way  in  which  the  European  populations  have 
been  blended  into  the  body  politic.  They  have  not 
shown  the  same  willingness  or  ability  to  absorb  non- 
European  stocks  or  to  be  absorbed  by  them. 

The  American  people  have  declared  by  law  that  they 
will  not  allow  an  opportunity  to  arise  under  which 
Chinese  may  be  absorbed,  and  the  Japanese  are  ex- 
cluded by  law  plus  administrative  regulation.  They 
have  refused  to  absorb  the  aboriginal  Americans  and 
alliance  with  the  imported  non-European  stocks  brings 
social  ostracism.  Mexicans  in  the  United  States  hardly 
fare  better.  If  they  are  of  Spanish  ancestry,  that  fact 
is  emphasized  and  any  prejudice  against  them  disap- 
pears— they  are  then  Europeans.  If  they  are  not,  they 
suffer  the  same  discrimination  as  other  mixed  blood  or 
non-European  peoples.  The  same  unyielding  preju- 
dice follows  the  American  settler  in  Mexico.  He  is 
proud  to  remain  a  foreigner,  and  he  looks  with  disfavor 
on  any  alliance  of  his  sons  or  daughters  with  any  Mex- 
ican not  of  pure  European  ancestry. 

The  physical  features  of  the  border  have  contributed 
to  the  lack  of  good  understanding  between  Mexico  and 
the  United  States.  They,  of  course,  largely  determined 
the  settlement  or  the  lack  of  settlement  of  the  region. 
The  broad  dry  strip  of  territory  stretching  northward 
from  the  Gulf  of  Mexico  toward  the  mouth  of  the  Colo- 


THE  TROUBLESOME  BORDER       275 

rado  River  seemed,  until  the  coming  of  the  railroads, 
to  be  the  perfect  boundary,  which  theorists  have  imag- 
ined for  separating  nations.  It  was  almost  a  desert.  It 
was  not  valuable  land.  A  sparse  population  was  all  it 
could  support  where  it  could  support  any  at  all.  Small 
land-ownership  was  unthinkable. 

Mexican  efforts  to  control  this  region  had  always  been 
futile.  They  never  had  effective  control  over  the  region 
north  of  the  Rio  Grande  before  the  war  with  the  United 
States,  and  it  was  long  after  the  middle  of  the  last  cen- 
tury before  any  true  policing  of  the  district  south  of  it 
was  attempted.  Even  up  to  the  time  of  the  present 
revolution  the  native  tribes  of  her  northwest  disputed 
her  authority  with  fair  success. 

Effective  American  control  extended  southwestward 
more  rapidly  than  Mexican  governmental  authority 
came  to  meet  it,  but  it  would  be  easy  to  overemphasize 
the  fact.  At  all  times  it  is  difficult  to  police  a  sparsely 
settled,  arid  country,  such  as  the  lands  along  the  Mex- 
ican border  were  a  generation  ago.  They  continued  up 
to  our  own  day  to  be  a  region  wherein  things  were  done 
with  impunity — on  both  sides — that  neither  government 
would  approve,  a  territory  in  which  each  man  was,  to 
a  large  degree,  a  law  unto  himself.  It  was  a  place  where 
individualism  thrived,  where  self-help  was  at  a  premium, 
and  where  the  strong  one  was  too  often  the  judge  of  the 
rights  of  the  weak. 

A  region  like  the  Mexican  border  produced  and  drew 
to  itself  from  other  regions  a  not  too  gentle  population. 
The  only  life  that  could  be  lived  there  was  one  on  which 
adventurous  spirits  thrived.  Those  who  had  ventured 


276    MEXICO  AND  ITS  RECONSTRUCTION 

too  much  in  the  communities  of  their  birth  came  to  add 
their  bit  to  keep  life  on  the  border  from  becoming  dull. 
If  they  were  "wanted  back  home,"  they  had  a  tendency 
to  step  across  the  border,  whence  they  might  make  them- 
selves even  more  a  subject  of  anxiety  for  their  home  gov- 
ernments. 

Such  a  community,  as  it  grew,  developed  a  rough  and 
ready  character  not  inconsistent  with  respect  for  its 
own,  but  having  little  conscience  about  the  rights  of 
those  across  the  border.  The  records  of  the  foreign  rela- 
tions of  the  United  States  and  Mexico  for  the  '70s,  '80s 
and  '90s  of  the  past  century  are  interesting,  if  not  al- 
ways pleasant  reading.  They  are  by  no  means  records 
of  a  civilization  of  which  either  Mexicans  or  Americans 
can  be  uniformly  proud.  Raids,  violations  of  sover- 
eignty, contraband  trade,  corruption  of  officials,  mur- 
ders, miscarriage  of  justice,  stimulation  of  national  an- 
tipathy by  newspapers,  which  baited  each  other  across 
the  border — the  record  is  full  of  evidence  that  the  fric- 
tion in  Mexican- American  relations  was  so  great  that  a 
bursting  forth  into  flame  was  a  possibility  for  years 
and  doubtless  would  have  occurred  frequently  but  for 
the  efforts  of  the  governments  to  calm  the  local  dis- 
content. 

In  the  period  before  the  Diaz  regime  a  stream  of  com- 
plaints of  lawlessness  went  from  the  border  to  Wash- 
ington and  Mexico.  While  the  revolution  was  in  prog- 
ress the  partisans  of  Lerdo  de  Tejada  operated  along 
the  border  and  were  popular  in  certain  districts  of 
Texas.  At  times  they  allowed  United  States  troops 
freedom  to  operate  on  both  sides  of  the  river  to  put 


THE  TROUBLESOME  BORDER       277 

down  raiders.1  At  others  the  local  authorities  were  com- 
pletely out  of  hand  and  no  attempt  was  made  by  the 
Mexicans  to  control  them  nor  was  a  willingness  evi- 
denced to  let  the  United  States  exercise  effective  meas- 
ures to  check  wrongdoing.  On  the  north  side  of  the 
river  the  state  authorities  showed  a  disposition  to  act 
independently  when  the  central  government  refused  to 
give  life  and  property  protection  from  Mexican  aggres- 
sions. In  1874,  Governor  Coke  of  Texas  took  affairs 
into  his  own  hands  and  ordered  the  forces  under  his 
control  to  pursue  cattle  thieves  "both  on  this  side  of  the 
river  and  on  the  other,"  and  when  called  to  account  by 
Secretary  Fish,  refused  to  modify  his  orders.2  There 
were  several  invasions  by  Texas  troops  in  the  following 
year. 

During  this  period  the  offenses  against  order  were 
doubtless  more  frequent  from  the  Mexican  than  from 
the  American  side.  Indeed,  on  May  20,  1875,  Secre- 
tary of  State  Fish  made  the  statement  that  during  the 
four  years  previous  there  had  been  none  from  the  United 
States  and  challenged  proof  to  the  contrary.  The  state- 
ment was  handed  to  the  Mexican  minister  of  foreign 
affairs,  who  promised  to  examine  the  evidence  in  his 
office,  but  made  no  reply.3 

General  Diaz  came  into  power  November  29,  1876. 
The  United  States  refused  to  recognize  his  government, 

1  Shafter   to   the   Assistant   Attorney    General,    May    10,    1877, 
House  Document  13,  45th  Congress,  1st  Session,  p.  147. 

2  In  a  memorandum  left  by  Mariscal  with  Evarts  June  7,  1877* 
published  in  ibid.,  p.  61. 

3  Foster  to  Evarts,  June  28,  1877,  in  ibid.,  p.  80. 


278    MEXICO  AND  ITS  RECONSTRUCTION 

one  reason  being  that  there  was  "some  doubt"  whether 
his  government  "possessed  the  ability  and  the  disposi- 
tion to  check  the  raids  and  depredations  upon  Amer- 
ican property  in  the  vicinity  of  the  Rio  Grande."  In 
the  first  years  of  the  Diaz  regime  the  clashes  continued 
frequent.  Settlement  was  spreading  into  the  southwest 
and  the  plunderable  property  was  increasing  in  value, 
making  the  temptation  to  the  lawless  greater  and  the 
demand  for  redress  more  insistent.  For  several  years 
conditions  seemed  to  be  growing  steadily  worse.* 

The  border  was  a  "free  for  all"  region  in  these  years. 
It  is  impossible  to  make  distinction  between  American 
and  Mexican  outrages.  They  were  frequent  on  both 
sides  of  the  line,  and  it  was  often  difficult  to  tell  whether 
the  guilty  were  Mexicans  or  Americans.  The  popula- 
tion of  Texas  exaggerated  Mexican  faults  to  emphasize 
their  claims  for  damages  and  to  induce  the  government 
to  place  more  troops  on  the  border,  from  the  provision- 
ing of  which  the  local  population  might  prosper.  That 
this  was  true  was  admitted  by  the  American  Secretary 
of  State.5  State  and  national  control  of  the  border  later 
stiffened  and  wrongs  committed  against  Mexicans  north 
of  the  border  decreased  in  number. 

The  Diaz  administration,  then  striving  to  establish 
itself  within  the  country  and  among  the  family  of 

4  A  gloomy  review  by  Minister  J.  W.  Foster  of  the  condition  of 
Americans  in  Mexico  and  of  border  relations  covering  a  period  of 
more  than  five  years  is  found  in  Papers  Relating  to  the  Foreign 
Relations  of  the  United  States,  1879,  p.  755  et  seq. 

5  House    Document   13,   45th   Congress,   1st   Session,   Foster  to 
Evarts,  July  24,  1877,  in  a  Memorandum  of  the  Mexican  Minister 
of  Foreign  Affairs,  p.  38. 


THE  TROUBLESOME  BORDER       279 

nations,  did  not  consider  of  slight  importance  the  cross- 
ing of  the  border  by  American  troops  and,  while  anxious 
to  secure  the  friendship  of  the  United  States,  was  un- 
willing to  do  anything  that  seemed  to  cloud  what  was 
declared  to  be  a  principle  of  national  sovereignty.  In 
taking  this  position  the  government  received  the  hearty 
support  of  the  press.6  The  administration  insisted  that 
in  the  later  '70s  raids  were  becoming  less  frequent/ 
When  an  instance  of  violation  of  American  territory 
by  Mexicans  was  brought  to  his  attention,  President 
Diaz  gave  complete  disavowal  and  promised  prompt 
investigation,  reparation,  and  punishment.8  He  with- 
drew to  the  interior  generals  toward  whom  the  United 
States  had  expressed  distrust  and  whom  it  appears  Diaz 
himself  could  not  fully  control.9  He  sought  a  similar 
standard  of  action  from  the  United  States. 

But,  for  the  United  States,  evidences  of  the  Mexican 
desire  to  relieve  the  tense  situation  on  the  border  were 
not  enough.  The  Mexican  generals  who  were  sent  to 
replace  those  who  had  shown  themselves  in  sympathy 
with  border  lawlessness  were  given  a  cool  reception  by 
the  Mexican  state  and  local  officials  and  their  authority 
was  not  recognized.  Between  October,  1876,  and  March, 
1877,  it  was  reported  Indian  marauders  from  Mexico 
killed  17  men  and  the  arms  and  horses  taken  from  the 


8  See  collection  of  newspaper  comments  in  ibid.,  p.  21  et  seq. 

7  Memorandum    by   Mexican    Minister    of   Foreign   Affairs    for- 
warded to  Secretary  Evarts  by  Minister  Foster,  July  24,  1877,  in 
ibid.,  p.  40. 

8  Foster  to  Evarts,  July  9,  1877,  ibid.,  p.  34. 

9  Foster  to  Fish,  March  3,  1877,  ibid.,  p.  3. 


280    MEXICO  AND  ITS  RECONSTRUCTION 

murdered  men  were  openly  offered  for  sale  in  Mexico. 
Large  numbers  of  horses  and  cattle  were  driven  from 
Texas  into  Mexico.  In  one  instance  a  raiding  party 
was  followed  over  150  miles  into  the  country  to  their 
camp  "where  nearly  100  of  the  cattle  had  been  slaught- 
ered and  beef  was  found  drying."  The  marauders  found 
a  refuge  in  the  Mexican  towns  when  pursued  and  sold 
their  plunder  there.  In  some  cases  American  troops 
crossed  the  border  and  punished  the  offenders.  The 
United  States  military  authorities  declared  "that  the 
only  way  to  check  these  atrocities  is  to  follow  the  delin- 
quents into  Mexico  and  there  attack  them  in  their  lairs.10 
The  Government  of  the  United  States  was  coming  to 
feel  that  if  the  outrages  were  persisted  in,  it  would 
adopt  this  policy  with  or  without  the  consent  or  acquies- 
cence of  Mexico. 

Matters  came  to  a  head  on  June  1,  1877,  when  the 
Secretary  of  War  wrote  General  Sherman  instructing 
him  to  notify  General  Ord,  commanding  the  border 
forces,  to  ask  the  cooperation  of  the  Mexicans  in  bring- 
ing an  end  to  disorder  and  to  inform  them  that  while 
the  President  was  anxious  to  avoid  giving  offense,  "the 
invasion  of  our  territory  by  armed  and  organized  bodies 
of  thieves  and  robbers"  could  "not  be  longer  endured." 
General  Ord  was  informed  that  if  Mexico  continued  to 
neglect  to  suppress  such  bands,  the  duty  to  do  so  would 
rest  upon  the  United  States,  and  the  duty  would  be 
performed  "even  if  its  performance  should  render  neces- 

10  Evarts  to  Foster,  ibid.,  p.  4,  citing  a  report  of  P.  H.  Sheridan 
which  refers  to  an  opinion  of  Colonel  Shafter. 


THE  TROUBLESOME  BORDER       281 

sary  the  occasional  crossing  of  the  border  by  our  troops." 
General  Ord  was  informed  that  he  was  "at  liberty,  in 
the  use  of  his  own  discretion,  when  in  pursuit  of  a  band 
of  marauders,  and  when  his  troops  are  either  in  sight  of 
them  or  upon  a  fresh  trail,  to  follow  them  across  the 
Rio  Grande,  and  to  overtake  and  punish  them,  as  well 
as  retake  stolen  property.  .  .  ." 

This  was  the  famous  Ord  order.  It  was  hardly  issued 
before  the  United  States  Government  had  to  complain 
that  Diaz  troops  had  driven  a  band  of  Lerdists  across 
the  river  into  Texas,  where  they  were  attacked  and  dis- 
persed. American  officers  asked  whether  they  should 
cross  to  punish  the  offending  forces.  They  were  in- 
structed not  to  cross,  but  a  prompt  disavowal  was  de- 
manded. 

The  Ord  order  meanwhile  created  a  widespread  pro- 
test in  Mexico,  and  under  date  of  June  18,  1877,  the 
Mexican  government  ordered  its  forces  to  resist  any 
crossing  and  to  "repel  force  by  force,  should  the  invasion 
take  place."  In  August  a  band  of  Mexicans  raided 
the  county  seat  of  Starr  County,  Texas.  American 
forces  followed  them  to  the  river  and  the  Governor  of 
Texas  demanded  the  extradition  of  the  criminals,  a 
demand  supported  by  the  United  States  Government. 
Mexico  now  made  a  serious  effort  at  reparation,  but  the 
border  officials  had  little  respect  for  the  demand  made 
upon  them.  Some  of  the  raiders  were  arrested  and  sur- 
rendered, although  the  extradition  treaty  did  not  de- 

11  Secretary  of  War  to  General  Sherman,  June  1,  1877,  ibid., 
p.  14. 


12 


Ibid.,  p.  18  et  seq. 


282    MEXICO  AND  ITS  RECONSTRUCTION 

mand  it.  The  local  authorities  refused  to  surrender  the 
rest.  An  American  force  crossed  the  border  in  October 
in  pursuit  of  marauding  Indians,  but,  on  the  approach 
of  Mexican  troops,  retired. 

By  this  time  the  Ord  order  had  been  modified  on  as- 
surance that  Diaz  recognized  the  gravity  of  the  situa- 
tion and  would  send  to  the  border  a  prudent  general 
with  an  adequate  force.13  General  Ord  was  instructed 
to  cooperate  with  the  Mexican  general  and  to  cross  the 
border  only  in  an  aggravated  case.  The  instruction  did 
not  stop  the  crossings.  A  proposal  to  allow  reciprocal 
privilege  met  a  non-committal  answer  from  the  Mex- 
ican commander.  The  officers  had  received  commands 
not  to  attack  the  United  States  troops,  but  to  "see"  them 
cross  the  border.14  Later  the  objectionable  Ord  order 
was  revoked  to  the  great  satisfaction  of  Mexico.15 

In  the  meantime  Minister  Foster,  on  April  24,  1877, 
recommended  that  recognition  be  given  Diaz  by  the 
United  States,  in  the  belief  that  this  might  strengthen 
the  hands  of  the  government.16  On  March  23,  1878, 
though  conditions  in  Mexico  were  still  unsatisfactory, 
the  President  instructed  the  American  Minister  that 
the  Diaz  government  was  formally  recognized.17  Later 
in  the  year  Mexico  was  still  unable  to  repress  raids  and 
the  United  States  again  declared  it  would  not  stand 

"Under  date  of  June  9,  1877,  ibid.,  p.  101. 

14  Ibid.,  pp.  45-240,  passim. 

15  Papers  Relating  to  the  Foreign  Relations  of  the  United  States, 
1880-1,  p.  735. 

18  Foster  to  Evarts,  April  24,  1877,  op.  cit.,  p.  6. 
17  Papers  Relating  to  the  Foreign  Relations  of  the  United  Statei, 
1878,  pp.  543  and  573. 


THE  TROUBLESOME  BORDER       283 

i 
quietly  by  while  the  criminals  were  allowed  to  flee  int6 

Mexico,  there  to  have  refuge  from  just  punishment. 
"When  Mexico  will  pursue  the  marauders,  the  United 
States  will  be  glad  to  stop  doing  so  at  its  own  bound- 
ary," but  cases  in  which  Mexican  troops  were  fed  with 
the  cattle  yielded  by  border  raids,  the  commanding 
officer  knowing  of  the  theft,  protecting  the  raiders,  and 
furnishing  them  with  arms,  were  unbearable.  If  Mex- 
ico could  not,  or  would  not,  punish  such  acts,  the  United 
States,  it  was  intimated,  would  have  to,  whatever  hap- 
pened to  the  theory  of  sovereignty  in  the  meantime.18 

While  these  events  were  taking  place,  the  govern- 
ments were  in  negotiation  to  try  to  secure  some  basis  for 
an  agreement  by  which  the  threatening  clash  could  be 
avoided.  Finally,  in  1881,  a  limited  reciprocal  right  of 
crossing  was  arranged,  but  one,  unfortunately,  that  it 
proved  impossible  to  make  permanent.  Though  the 
agreement  did  not  satisfy  either  side,  it  helped  to  bridge 
over  what  proved  to  be  the  period  of  greatest  danger. 
Both  sides  continued  to  report  atrocious  happenings, 
but  there  developed  a  greater  willingness  to  admit  that 
the  problem  was  a  mutual  one  in  which  the  elimination 
of  the  cause  was  at  least  as  important  as  the  mainte- 
nance of  the  theoretic  rights  of  sovereignty. 

General  Polk,  commanding  the  Department  of  the 
Missouri  in  the  early  '80s,  declared  it  beyond  question 
"that  bands  of  thieves  infest  the  whole  southwest  and 
plunder  citizens  in  both  countries."  "They  .  .  .  are 
sometimes  occupied  in  smuggling,  at  others  in  steal- 

18  Ibid.,  p.  612. 


284.    MEXICO  AND  ITS  RECONSTRUCTION 

ing."  19  A  few  years  later  a  similar  complaint  was  made 
by  Mexico.  Her  minister  of  foreign  affairs  complained 
that  American  Indians  crossed  the  border,  committed 
depredations,  and  then  fled  across  the  protecting  bound- 
ary. It  was  claimed  by  the  Governor  of  Chihuahua  that 
in  less  than  one  month  more  than  60  persons  had  been 
killed  by  savages  in  that  state  alone.  "It  is  high  time," 
concludes  the  Minister  of  Foreign  Affairs,  "for  the 
honor  of  the  age  in  which  we  live,  for  the  honor  of  two 
powerful  neighboring  Republics,  for  the  sake  of  the 
friendship  that  happily  exists  between  them,  .  .  .  that 
a  stop  be  put  to  [these]  frightful  scenes,  .  .  ." 20  As 
the  Diaz  government  succeeded  in  establishing  itself  and 
as  the  settlement  and  better  policing  of  the  American 
side  of  the  river  progressed,  the  danger  of  a  breach  be- 
tween the  two  governments  lessened. 

The  source  of  complaint  gradually  shifted  to  the  west- 
ward and,  as  exploitation  of  the  resources  of  the  border 
states  progressed,  especially  after  the  railroads  crossed 
the  boundary,  southward.  The  border  problem  broad- 
ened and  became  one  involving  the  general  protection 
of  the  life  and  property  of  foreigners.  The  violation  of 
sovereignty  by  crossing  the  frontier  in  one  direction  or 
the  other  was  less  common  and  the  rights  of  resident 
aliens  came  more  frequently  under  discussion.  Since 
the  economic  development  of  the  country  was  spread- 
ing from  north  to  south,  it  was  natural  that  the  disputes 
should  more  frequently  involve  the  rights  of  United 
States  citizens  in  Mexico  than  the  reverse. 

19  Ibid.,  1881,  p.  756.  aolbid.,  1883-4,  p.  680  et  seq. 


THE  TROUBLESOME  BORDER       285 

The  border  itself  was  still  a  source  of  irritation,  but 
a  less  insistent  one.  At  times  each  government  showed 
a  disposition  to  blame  the  other  or  to  explain  its  own 
shortcomings  by  reference  to  peculiar  disadvantages 
under  which  its  military  forces  worked.  By  1892, 
though  the  military  measures  taken  had  "sufficed  to 
make  .  .  .  lawless  attempts  very  dangerous  and  un- 
profitable to  the  criminal,"  who  might  or  might  not 
operate  under  a  political  disguise,  there  was  still  enough 
marauding  to  keep  the  discussion  warm.  The  Mexican 
Minister  of  Foreign  Affairs  and  the  American  Secre- 
tary of  State  continued  to  complain  to  each  other  against 
raids  by  groups  of  bandits  from  across  the  border.  The 
Mexican  statesman  asserted  that  when  the  bands  crossed 
into  Mexico  they  were  beaten  back  toward  the  border 
across  which  they  fled,  taking  refuge  in  the  United 
States,  whence  they  could  again  issue  as  soon  as  the 
vigilance  of  the  Mexican  troops  relaxed  or  other  favor- 
able circumstances  developed.  Local  sentiment  along 
the  border  was  still  declared  not  to  be  against  the  ban- 
dits, as  was  shown  by  "culpable  connivance  or  tolerance 
on  the  part  of  certain  functionaries  in  Texas."  More 
federal  troops  should  be  provided  for  keeping  the  peace. 
The  American  government  replied  that  "the  efforts  of 
the  United  States  Government  to  prevent  these  raids 
from  its  territory  into  Mexico  seem  to  receive  little  co- 
operation .  .  .  from  the  Mexican  side.  .  .  ."  If  Mex- 
ico would  only  keep  a  force  on  the  south,  such  as  the 
United  States  had  on  the  north,  all  would  be  well. 
Mexico  apparently  found  it  inadvisable  to  attempt  to 
maintain  a  force  of  such  size  as  was  suggested  by  her 


286    MEXICO  AND  ITS  RECONSTRUCTION 

northern  neighbor  and  the  United  States  was  indisposed 
to  increase  the  number  of  its  troops.  It  felt  that  the 
running  down  and  punishment  of  the  guilty  was  a  better 
method  of  stamping  out  banditry  than  the  adoption  of 
extensive  preventive  measures. 

On  both  sides  the  control  of  the  marauders  was  ren- 
dered difficult  by  their  methods  of  operation.  A  band 
might  be  collected  in  the  United  States,  for  example, 
with  the  intent  of  raiding  Mexico,  but  it  would  cross 
the  border  casually  at  different  points  as  individuals. 
Meeting  at  a  rendezvous,  the  depredations  would  be 
committed,  and  the  guilty  would  again  disperse.  The 
only  time  when  the  band  could  be  met  as  a  band,  there- 
fore, was  when  the  wrongful  acts  were  actually  being 
committed. 

The  same  circumstances  surrounded  raids  from  Mex- 
ico against  the  United  States.  In  the  latter  country, 
at  least,  there  was  the  added  difficulty  that  the  pursuit  of 
the  wrongdoers  was  a  duty  of  the  civil  authorities  of 
the  government  or  of  Texas  and  the  troops  could  only 
aid  the  United  States  marshals  as  a  part  of  their  posse. 
Cooperation  by  allowing  a  reciprocal  crossing  of  the 
boundary  in  pursuit  of  wrongdoers  seemed  an  obviously 
desirable  privilege  and  one  that  Mexico  now  seemed  dis- 
posed to  grant,  while  the  United  States  held  back.  For 
both  countries  this  was  a  curious  reversal  of  position 
compared  to  the  early  '80s.  The  United  States  felt 
that  the  increase  of  settlement  made  the  problems,  which 
would  arise  under  such  conditions,  more  serious  than 
formerly.  The  military  authorities  in  charge  of  border 
affairs  did  not  favor  a  renewal  of  the  arrangement.  It 


THE  TROUBLESOME  BORDER       287 

did  prove  possible,  however,  to  arrange  for  cooperation 
in  notifying  the  forces  of  each  country  of  possible  raids 
and  to  station  the  troops  in  such  a  way  that  the  fords 
could  be  more  effectively  policed.21  In  at  least  one  case 
a  reciprocal  right  of  crossing  was  arranged.22 

Impartially  considered,  it  is  plain  that  in  the  border 
incidents  the  shortcomings  did  not  lie  wholly  on  one 
side.  At  times  each  country  found  itself  drawn  into 
defending  persons  because  of  their  nationality  who  de- 
served no  protection  from  any  one.  Sometimes  the  rules 
of  international  law,  which  were  intended  to  promote 
good  relations  among  nations,  seemed  to  be  the  chief 
cause  of  entanglements.  For  example,  it  was  not  always 
easy  to  differentiate  border  raids  from  "revolutions" 
or  either  of  these  from  the  Indian  depredations,  which 
even  down  to  our  own  day  have  continued  to  be  a  source 
of  disturbance  along  the  boundary.  In  the  discussions 
of  pursuit  of  wrongdoers  across  the  border  there  has 
been  a  conspicuous  lack  of  willingness  to  recognize  the 
fact  that  under  the  conditions  that  have  existed  it  would 
be  better  for  both  parties  to  place  considerations  of  pub- 
lic order  and  justice  above  insistence  upon  scrupulous 
observance  of  the  "rights  of  sovereignty." 

Where  settlement  is  sparse,  policing  on  account  of 
great  distances  is  difficult,  and  the  boundary  itself  often 
hard  to  locate,  opportunities  for  the  lawless  flourish  and 
shuttling  back  and  forth  across  an  imaginary  line  is 
an  easy  way  to  defy  the  law.  The  local  population  on 
both  sides  of  the  border  frequently  looks  upon  the  bandit 

21  These  facts  are  summarized  from  ibid.,  1893,  vol.  1,  pp.  429-55. 

22  Ibid.,  1896,  p.  438. 


288    MEXICO  AND  ITS  RECONSTRUCTION 

as  a  semi-hero,  if  he  confines  his  operations  to  the  other 
side  of  the  boundary.  Evidence  of  guilt  is  hard  to  secure 
partly  because  of  this  sympathy  and  partly  because  of 
fear  of  retaliation  by  friends  of  the  accused.  Dissatis- 
faction is  sure  to  result,  especially  when  one  country 
does  not  or  cannot  maintain  as  efficient  a  police  patrol 
as  does  its  neighbor.  Add  to  these  elements  a  roving 
population,  one  that  gives  only  nominal  respect  to  either 
soverefgnty,  such  as  the  border  Indian  tribes  were,  and 
trouble  is  very  likely  to  rise.  If  either  side  yields  to  the 
temptation  to  enlist  these  aborigines  in  its  own  military 
forces,  either  as  guides  or  as  soldiers,  as  both  Mexico 
and  the  United  States  formerly  did,  clash  is  almost  un- 
avoidable. Looked  at  long  after  the  event,  it  is  not  re- 
markable that  there  were  such  acrid  interchanges  be- 
tween the  two  governments.  It  is  to  the  credit  of  botli 
that  wiser  counsels  prevailed  and  that  the  many  technical 
causes  of  war  were  kept  in  their  proper  perspective. 

The  meticulous  insistence  on  respect  for  technical 
rights  under  international  law,  which  some  border  inci- 
dents involved,  makes  the  history  of  some  of  them  amus- 
ing as  well  as  illustrative  of  frontier  conditions  and 
psychology.  One  of  these  was  the  much-discussed  case 
of  Jesus  Garcia  arising  in  1896. 

The  incident  arose  in  Nogales,  a  town  located  on  both 
sides  of  the  border,  with  a  street  running  diagonally 
through  it  which  crosses  the  boundary  line.  Garcia  was 
a  powerful  man  described  as  "a  low-down  desperado," 
who  was  at  the  time  of  the  incident  "on  a  general  drunk," 
"bulldozing  the  saloons."  He  and  another  Mexican 
came  out  of  a  saloon  on  the  American  side  of  the  line 


THE  TROUBLESOME  BORDER       280 

and  began  to  fight.  An  American  officer  ran  toward 
them  and  arrested  them  on  the  American  side  of  the 
boundary.  Garcia  resisted.  The  officer  called  for  as- 
sistance and  another  American  ran  from  the  Mexican 
side  of  the  line  and  collided  with  Garcia,  who  fell  with  his 
head  and  a  small  part  of  his  body  on  Mexican  territory. 
No  blow  was  struck.  Garcia  was  then  marched  toward 
tjie  jail  and  on  again  resisting  was  struck  with  a  leather 
walking  cane  to  quiet  him.  No  blood  was  drawn. 

As  reported  to  the  Mexican  government  and  made 
the  basis  of  diplomatic  protest,  this  case  had  a  decidedly 
different  character.  Two  Americans,  one  an  officer, 
crossed  into  Mexican  territory  to  arrest  Garcia.  The 
civilian  knocked  him  down  and  the  officer  beat  him 
while  prostrate.  They  then  dragged  him  across  the  line 
into  Arizona,  assisted  by  another  American  civilian.  On 
the  way  to  the  prison  the  Mexican  was  again  subjected 
to  a  cruel  beating. 

That  such  an  affair  should  be  raised  to  the  dignity  of 
an  international  incident  would  seem  ridiculous  and  im- 
possible if  the  high  state  of  feeling  and  the  willingness 
to  twist  evidence  resulting  therefrom  were  not  real- 
ized.23 The  affair  was  finally  patched  up  through  ac- 
ceptance by  the  Mexican  authorities  of  the  statement 
that  no  invasion  of  Mexican  territory  was  contemplated 
and  the  declaration  that  in  the  opinion  of  the  United 
States  none  had  occurred.24 

23  Ibid.,    1893,   vol.    1,   p.    457,   also   ibid.,    1896,   pp.   439,   448, 
449,  454. 

24  A  review  of  the  various  incidents  which  kept  feeling  aroused 
along  the  border  is  obtainable  in  Papers  Relating  to  the  Foreign 


290    MEXICO  AND  ITS  RECONSTRUCTION 

The  opening  years  of  the  nineteenth  century,  during 
which  the  Diaz  regime  was  reaping  the  reward  of  its 
efforts  to  establish  order  and  induce  the  economic  de- 
velopment of  the  country,  brought  the  period  of  most 
cordial  relations  between  Mexico  and  the  United  States. 
The  border  problem  was  not  at  an  end,  but  it  was  active 
only  in  Arizona  and  New  Mexico  and  even  there  in- 
volved not  so  much  raids  across  the  boundary  as  the 
prevention  of  the  purchase  in  the  border  towns  of  arms 
and  ammunition,  which  were  later  used  by  the  Indians 
against  American  citizens  living  south  of  the  border. 
The  attitude  of  the  local  authorities  in  the  Mexican 
northwest  toward  American  settlers  also  continued  to 
be  a  matter  of  complaint.25  Both  governments  were 
anxious  to  do  all  in  their  power  to  remove  the  reasons 
for  friction. 

The  Yaqui  Indians,  against  whose  acts  the  most  nu- 
merous protests  were  made,  are  a  Sonora  tribe,  about 

Relations  of  the  United  States.  Some  of  the  more  important  dis- 
putes illustrating  phases  of  the  border  problem  are  found  at  the 
following  points:  1878,  p.  679,  illustrating  "revolutionary"  activ- 
ity; 1888,  vol.  2,  p.  1176,  illustrating  border  kidnapping;  1893, 
vol.  1,  p.  468,  illustrating  difficulty  of  securing  evidence  as  to  raid- 
ers; 1895,  pp.  997-1013,  illustrating  position  of  refugees  guilty  of 
embezzlement;  1897,  pp.  372  and  405,  illustrating  claims  for  dam- 
ages caused  by  disturbance  of  public  order.  What  is  a  political 
act?,  also  ibid.,  1898,  pp.  491-510;  1899,  p.  499,  illustrating  unwill- 
ingness to  surrender  citizens  to  justice  of  another  country;  1904, 
pp.  462-72,  illustrating  the  prejudices  of  lower  Mexican  courts,  and 
ibid.,  pp.  473-81,  illustrating  attitude  of  Texas  authorities  toward 
Mexican  delinquents. 

25  Correspondence  illustrating  both  phases  of  the  problem  is  found 
in  ibid.,  1905,  p.  639  et  seq. 


THE  TROUBLESOME  BORDER       291 

whose  wrongs  and  wrongdoings  much  discussion  has  oc- 
curred in  both  Mexico  and  the  United  States.  Part  of 
the  tribe  were  peaceful,  but  others  were  chronic  trouble- 
makers, who,  as  President  Diaz  once  reminded  the 
American  Ambassador,  were  comparable  to  the  Apaches 
with  whom  the  United  States  had  had  so  much  diffi- 
culty.26 They  were  especially  active  against  Americans. 
These,  the  most  prominent  foreigners  engaged  in  ex- 
ploitation of  the  country,  they  looked  upon  as  disturbers 
of  what  they  considered  the  immemorial  privileges  of  the 
tribe.  The  Mexican  government,  at  least  the  central 
government,  did  its  best  to  punish  the  guilty,  but  it 
could  not  always  rely  upon  the  soldiers  it  sent  to  punish 
the  Indian  bands.  It  adopted  the  policy  i of  taking  arms 
and  ammunition  away  from  the  Indians,  thinking  that 
would  bring  an  end  to  the  trouble.  After  1903  the  gov- 
ernment deported  to  Yucatan  and  Quintana  Roo  many 
Indians  who  had  taken  part  in  marauding."  Others 
were  sent  to  colonization  enterprises  in  Sinaloa  and  still 
others  set  to  work  in  convict  gangs  in  Sonora.  To  those 
who  were  disposed  to  settle  down  to  a  peaceful  life  the 
government  supplied  farming  implements,  farm  animals, 
and  poultry  in  Sinaloa.28  The  Indians,  however,  con- 
tinued to  cross  into  Arizona  towns  "to  work,"  where 
they  replenished  their  ammunition  supplies  and  then  re- 
turned to  Mexico  to  start  trouble  again.  The  local  au- 

™Ibid.,  1906,  p.  1142. 

27  Accounts  of  transfer  of  parties  of  such  Indians  are  found  in 
ibid.,  p.   1134  et  seq.     The  policy  of  the  government  toward  the 
Yaquis,  as  described  by  Diaz,  is  outlined  at  p.   1141. 

28  Ibid.,  1905,  p.  648. 


292    MEXICO  AND  ITS  RECONSTRUCTION 

thorities  were  instructed  to  furnish  escorts  to  Ameri- 
cans when  they  went  outside  the  settled  districts.  It 
does  not  appear  that  such  protection  was  always  given, 
and  in  some  cases  when  proffered  it  was  declined  by 
Americans,  especially  by  mining  prospectors,  who  did 
not  want  to  have  their  movements  observed.29 

In  1906  President  Diaz  asked  whether  the  United 
States  would  not  give  its  active  cooperation  to  stop  the 
Yaquis  from  getting  supplies  of  arms  in  the  way  in- 
dicated.80 To  do  so  would  make  it  possible  to  assure 
order  in  the  northwest  states,  promote  their  develop- 
ment, protect  the  lives  of  American  citizens,  and  help 
to  eliminate  the  claims  for  damages  against  the  govern- 
ment of  Mexico.  The  President, of  the  United  States 
promised  to  do  what  he  could  to  help.  In  the  follow- 
ing year  the  Secretary  of  the  Interior  asked  the  Gov- 
ernor of  Arizona  to  put  into  effect  again  precautionary 
measures  to  prevent  smuggling  of  arms.  This  he  did. 
Similar  orders  were  issued  by  the  Secretary  of  the  Treas- 
ury to  the  Customs  Collector  at  Nogales.  In  1908  the 
United  States  government  concentrated  forces  along 
the  border  to  stop  fleeing  marauders  from  seeking  ref- 
uge in  American  territory,81  thus  assisting  the  Mexican 
troops  to  stamp  out  disorder. 

In  short,  in  the  closing  years  of  the  Diaz  regime  there 
was  cordial  cooperation  between  the  government  of 

29  A  number  of  incidents  illustrating  these  conditions  are  described 
in  ibid.,  p.  639  et  seq. 

™Ibid.,  1906,  p.  1149;  see  also  ibid.,  1907,  p.  846  et  seq. 

81  Ibid.,  1908,  p.  604,  quoting  the  Mexican  Herald  of  September 
17,  1908. 


THE  TROUBLESOME  BORDER       293 

Mexico  and  the  United  States  for  the  elimination  of  the 
border  problem.  Possibility  of  friction  still  existed  for 
reasons  of  a  nature  that  it  will  be  difficult  to  remove, 
but  the  old  suspicion  and  animosity  shared  by  large  num- 
bers of  both  peoples,  which  made  the  border  a  source 
of  constant  irritation  for  both,  was  rapidly  passing.  The 
border  problem  was  less  a  problem  than  it  had  ever 
been.  American  economic  interests  had  spread  south- 
ward far  beyond  the  boundary,  and  Mexico  realized 
and  admitted  her  duty,  under  international  law  and 
the  rules  of  comity,  to  give  them  full  protection.  Mex- 
ican interests  had  grown  in  the  United  States,  not  in 
the  development  of  the  economic  resources  of  that 
country,  for  Mexico  was  still  a  non-industrial  debtor 
nation  and  had  no  large  amounts  of  capital  seeking  in- 
vestment abroad,  but  through  the  realization  that  the 
two  countries,  which  had  such  close  geographical  rela- 
tions, had,  in  their  foreign  trade,  an  economic  common 
interest  that  closely  bound  the  fortunes  of  the  one  to 
the  fortunes  of  the  other. 

The  good  feeling  that  existed  between  the  two  re- 
publics was  illustrated  by  the  expressions  of  apprecia- 
tion that  passed  between  them  just  before  the  close 
of  tne  Diaz  regime. 

The  American  Ambassador,  speaking  at  a  luncheon 
of  the  American  Colony  in  1907,  contrasted  the  Mexico 
of  that  day  with  the  one  he  had  first  known.  He  de- 
clared:82 


32  Papers  Relating  to  the  Foreign  Relations  of  the  United  States, 
1907,  p.  859. 


294    MEXICO  AND  ITS  RECONSTRUCTION 

Thirty-one  years  ago  conditions  in  Mexico  were  such  that 
in  few  places  could  a  man  be  reasonably  sure  of  his  life,  if  there 
was  the  slightest  cause  for  it  to  be  taken.  At  that  time  the 
country  was  filled  with  banditti  .  .  .  and  little  thought  was 
given  by  the  masses  to  anything  other  than  unfriendly  strife. 
.  .  .  The  national  finances,  in  1876,  were  at  the  lowest  possible 
ebb  and  even  at  the  late  date  of  1902  the  total  revenue  of  the 
Republic  was  only  $66,147,048,  while  the  revenue  for  the  fiscal 
year  just  closed  was  $113,000,000,  leaving  a  surplus  of  near 
$20,000,000  beyond  all  national  requirements.  .  .  .  The  more 
than  30  years  since  1876  have  brought  revolution  after  revo- 
lution in  Mexico,  but  not  revolutions  of  the  old  kind.  The 
revolutions  of  the  past  30  years  have  been  those  of  mind  and 
of  commercial  industry.  .  .  .  Thirty  years  ago  there  were 
practically  no  Americans  in  Mexico,  and  the  few  that  were 
here,  with  now  and  then  an  exception,  were  here  because  they 
could  not  stay  at  home,  and  there  was  no  American  capital  in- 
vested in  the  Republic.  To-day  what  a  different  condition  we 
find.  .  .  .  There  are  in  the  Republic  of  Mexico  something  like 
40,000  Americans,  and  the  majority  of  them  are  honest  and 
industrious  people  who  would  be  a  credit  to  any  country.  Their 
sphere  of  action  covers  practically  every  known  occupation. 

Secretary  Elihu  Root,  the  guest  of  honor  at  a  ban- 
quet given  by  the  Minister  of  Foreign  Affairs,  carried 
the  statement  further.  He  said : sa 

I  suppose  that  the  true  object  which  should  be  held  before 
every  statesman  is  to  deal  with  the  questions  of  the  present  so 
that  the  spirit  in  which  they  are  solved  will  commend  itself  to 
the  generations  of  the  future.  .  .  .  The  Government  of  Mexico 
has  attained  that  high  standard  of  statesmanship  to  an  extraor- 
dinary degree.  It  certainly  has  done  so  in  its  relations  with 
the  Government  of  the  United  States,  and,  as  a  result  of  the 

» ibid:,  p.  867. 


THE  TROUBLESOME  BORDER       295 

reasonable  and  kindly  way  in  which  we  have  been  treating  each 
other  for  these  past  years,  .  .  .  there  has  grown  up  and  is 
continually  developing  between  the  people  of  the  two  countries 
a  knowledge  of  each  other,  an  appreciation  of  each  other,  a 
kindly  feeling  toward  each  other  which  makes  for  the  perpetuity 
of  good  government  in  both  countries  and  for  the  development 
of  all  the  finer  and  better  parts  of  citizenship  in  both  countries. 

Among  the  friendly  declarations  from  the  Mexican 
side  that  which  touches  best  the  old  distrust  and  the  new 
confidence  between  the  two  countries  was  perhaps  that 
of  Manuel  Calero,  President  of  the  Chamber  of  Depu- 
ties, who  said : 3* 

That  you  once  wronged,  that,  when  burning  political,  eco- 
nomical, and  humane  problems  beset  you,  the  course  of  justice 
was  momentarily  hampered,  we  have  not  forgotten;  we  have 
not.  But  as  the  years  rolled  on  you  have  won  back,  inch  by 
inch  your  place  in  our  affection;  the  intercourse  every  day 
closer  and  closer  between  your  people  and  ours,  stepping  over 
the  bounds  set  by  race  and  tongue,  has  infused  new  life  into  this 
feeling  of  mutual  good  will  and  friendship,  which  tend  to  estab- 
lish harmony  of  ideals  and  close  similarity  of  destiny. 

Two  years  later  there  occurred  the  first  exchange  of 
visits  between  the  Presidents  of  the  two  republics  and 
the  first  visit  of  an  American  President  to  Mexico.  At 
that  meeting,  after  President  Diaz  had  spoken  of  the 
cultivation  and  maintenance  of  the  cordial  relations 
existing,  President  Taft  in  his  reply  took  "occasion  to 
pronounce  the  hearty  sentiments  of  friendship  and  ac- 
cord with  which  the  American  public  regard  the  Mex- 
ican people."  He  declared,  "The  aims  and  ideals  of 

**Ibid.,  p.  855. 


296    MEXICO  AND  ITS  RECONSTRUCTION 

our  two  nations  are  identical,  their  sympathy  mutual 
and  lasting,  and  the  world  has  become  assured  of  a  vast 
neutral  zone  of  peace,  in  which  the  controlling  aspira- 
tion of  either  nation  is  individual  human  happiness." 

Few  were  they  who  realized  upon  what  an  insecure 
foundation  the  Diaz  regime  rested.  Order  had  been  so 
long  established  that  even  the  majority  of  those  well 
acquainted  with  local  conditions  had  come  to  consider 
it  as  a  matter  of  course  and,  in  her  foreign  affairs, 
Mexico  had  come  to  enjoy  a  position  of  greater  prestige 
than  any  other  Latin- American  state.  Capital  was  flow- 
ing from  abroad  to  develop  her  industries,  interest  on 
public  obligations  was  being  promptly  met,  there  was 
a  surplus  in  the  public  treasury  that  could  be  devoted 
to  the  improvement  of  the  conditions  of  the  country. 
There  was  no  cloud  on  the  international  horizon.  Re- 
lations with  all  foreign  nations  were  friendly  and  with 
the  United  States,  the  country  with  which  the  republic 
is  of  necessity  most  closely  associated  in  foreign  affairs, 
relations  were  cordial.  The  two  countries  had  greater 
confidence  in  each  other  than  ever  before.  The  wounds 
of  the  conflict  of  two  generations  before  were  healing, 
the  irritations  of  border  conflicts  were  at  a  minimum. 
Everything  seemed  to  justify  the  hope  that  there  had 
been  created  in  North  America  an  area  within  which 
peace  internal  and  external  was  secure. 

**Ibid.,  1909,  pp.  425-8. 


CHAPTER  XXI 

MEXICAN-AMERICAN  RELATIONS 

THE  foreign  relations  of  Mexico  begin  with  the  offi- 
cial recognition  of  her  independence  by  the  United 
States.  The  first  representative  of  Mexico  was  sent 
to  Washington.1  With  the  exception  of  the  period  of 
the  Mexican  War,  the  two  countries  have  been  at  peace 
officially  though  differences  of  opinion  have  been  fre- 
quent, acrid,  and,  at  times,  threatening.  The  list  of 
subjects  on  which  amicable  adjustments  have  been 
arrived  at  is  a  long  one  and  a  credit  to  both.  They 
have  had  frequent  recourse  to  arbitration.  In  this 
way  they  have  set  the  example  to  other  nations,  both 
before  and  after  the  foundation  of  the  Hague  Tribunal. 
They  have  settled  the  complaints  of  their  citizens  by 
Claims  Commissions.  After  decisions  have  been  defi- 
nitely made  by  such  Commissions  there  have  been  equi- 
table adjustments,  when  they  were  called  for  by  the 
discovery  of  new  evidence.2  Boundary  claims  have  been 
amicably  adjusted.  Jurisdiction  over  the  shifting 

1  See  discussion  in  Exposicwn  de  la  secretaria  de  hacienda  de  los 
estados  unidos  mexicanos  de  15  de  enero  .  .  .  Mexico,  1879,  p.  46. 

2  See  the  discussion  of  the  return  to  Mexico  of  money  paid  to  the 
United  States  under  decisions  by  the  United  States  and  Mexico 
Claims  Commission  after  production  of  evidence  showing  the  claims 
to  be   fraudulent,  in   Senate   Report,   50th   Congress,   2d   Session, 
1888-9,  vol.  4,  No.  2705,  and  in  Papers  Relating  to  the  Foreign 
Relations  of  the  United  States,  1900-1,  p.  781  et  seq.   (the  Abra 
Silver  Mine  Company  case),  and  in  ibid.,  p.  483  (the  Weil  case^. 

297 


bancos.,  or  shoals,  of  the  Rio  Grande  has  been  arranged 
by  friendly  compromise.  The  Pious  Funds  dispute  was 
taken  to  the  Hague  for  settlement  and  the  Chamizal 
controversy  was  turned  over  to  arbitrators.  Other  in- 
stances might  be  cited.  The  old  disputes  have  passed. 
They  have  all  gone  the  same  way.  The  new  ones  must 
follow  them. 

There  are  few  in  either  country  who  realize  the  im- 
portance of  Mexican- American  relations  to  both  coun- 
tries. American  relations  will  always  be  the  chief  ele- 
ment in  Mexican  foreign  policy.  That  is  a  fundamental 
fact,  no  matter  how  unwelcome  to  certain  classes  in 
Mexico.  Circumstances  beyond  the  control  of  any  gov- 
ernment, the  geographical  position  of  the  country,  and 
the  character  of  its  natural  resources  make  it  so. 

The  necessary  interrelations  of  the  two  countries  have 
made  the  more  timid  among  the  Mexican  population 
feel  that  geographical  unity  and  unity  of  economic  in- 
terest carried  with  them  the  danger  that  political  unity 
might  be  forced  upon  the  weaker  state.  They  are  ob- 
sessed by  the  belief  that  the  United  States  wants  to 
annex  Mexico.  They  are  confident  that  only  the  favor- 
able opportunity  is  lacking.  It  would  astonish  them  to 
know  how  small  a  part  of  the  people  of  the  United 
States  have  any  but  the  vaguest  of  ideas  about  the  re- 
public and  its  people  and  how  few  of  even  these  would 
consider  annexation  a  thing  to  be  desired.  Those  Mex- 
icans who  believe  that  an  advance  southward  will  be 
made  as  soon  as  an  excuse  can  be  found  cannot  know 
the  history  of  their  own  country.  Occasions  for  action 
there  have  been  in  great  number. 


MEXICAN-AMERICAN  RELATIONS    299 

The  United  States  does  not  "want"  Mexico.  To 
proceed  to  its  annexation  would  be  to  act  against  its 
political  impulses.  In  fact,  as  has  been  repeatedly 
shown,  the  United  States  will  endure  great  provoca- 
tion rather  than  come  to  conflict  with  the  Mexican  gov- 
ernment. That  under  no  circumstances  will  forcible 
action  ever  be  taken  nor  any  Mexican  territory  annexed 
is  unfortunately  a  corollary,  which  some  in  Mexico  have 
recently  come  to  believe  logically  follows.  Their  opin- 
ion has  unfortunately  been  given  no  little  support  by 
declarations  made  by  prominent  persons  in  the  United 
States  itself.  The  sooner  reliance  on  any  such  state- 
ments is  abandoned  the  better  for  the  peaceful  relations 
of  the  two  countries.  Neither  Mexico  nor  any  other 
state  can  count  on  the  freedom  from  responsibility  that 
such  a  policy  would  involve.  The  economic  advantage 
that  would  result  to  the  United  States  from  annexation 
as  contrasted  to  that  which  may  follow  independence 
and  friendship  is  doubtful.  Mexican  trade,  both  im- 
port and  export,  is  already  almost  inevitably  American 
and  investments  will  be  increasingly  so. 

The  United  States  does  want  order  in  Mexico,  and 
for  a  number  of  reasons.  Order  would  increase  its 
profitable  trade  exchange,  it  would  make  secure  the 
lives  and  properties  of  the  many  Americans  whose  in- 
terests are  bound  up  with  those  of  the  republic  and 
finally  it  would  simplify  maintenance  of  the  funda- 
mental principle  of  American  foreign  policy — that 
American  states  be  not  interfered  with  in  their  develop- 
ment by  non- American  political  influences.  Fair  treat- 
ment for  American  and  other  foreign  interests  in  Mex- 


300    MEXICO  AND  ITS  RECONSTRUCTION 

ico  and  friendly  adjustment  of  the  questions  that  must 
affect  the  two  governments  because  of  their  relative  posi- 
tion, this  is  all  that  the  United  States  wishes  from  its 
southern  neighbor. 

Mexican  relations  are  not  the  most  important  fac- 
tor in  American  foreign  policy.  At  times  they  may  rise 
to  that  prominence,  but  they  can  not  be  so  permanently. 
They  are  important  in  themselves  always  and  they  are 
important  because  they  do  touch  the  larger  international 
policy  above  referred  to.  In  fact,  the  United  States  has 
often  held  the  balance  in  Mexican  foreign  affairs,  as 
must  be  familiar  to  all  acquainted  with  Mexican  his- 
tory. Far  from  being  a  power  wishing  to  overthrow 
Mexican  independence,  the  United  States  has  been  its 
bulwark.  It  is  certainly  open  to  doubt  whether  there 
would  exist  to-day  an  independent  Mexico  if  it  had 
not  been  for  the  influence  of  the  United  States.  The 
policy  of  America  for  Americans  has  meant  something 
because  the  United  States  has  stood  ready  to  defend  the 
principle. 

Frankly  speaking,  this  policy  has  not  been  a  purely 
idealistic  one.  The  United  States  has  been  moved  by 
altruistic  motives,  but  its  own  political  and  economic 
interests  also  have  influenced  its  actions.  Mexico  can 
count  on  the  continuance  of  this  service  in  the  future 
whether  it  recognizes  and  welcomes  the  protection  or 
not.  Similarly,  the  desire  that  Mexico  shall  remain  in- 
dependent and  shall  become  a  strong  state  able  to  pro- 
tect itself,  or  at  least  contribute  powerfully  to  its  own 
protection  is  not  only  an  altruistic  desire  on  the  part  of 
the  United  States. 


MEXICAN-AMERICAN  RELATIONS    301 

There  are  many  ways,  of  course,  in  which  no  other 
country  can  assist  in  this  development.  If  Mexico  is 
to  find  the  way  out  of  her  travail  to  a  worth-while  inde- 
pendence, she  must  do  so  primarily  by  her  own  efforts. 
There  are  some  ways  in  which  she  can  be  assisted.  The 
granting  of  such  assistance  should  be  a  part  of  the 
policy  of  the  United  States,  not  only  because  of  its 
obligations  to  its  neighbor,  but  also  because  of  its  obliga- 
tion to  itself. 

Most  of  the  means  by  which  Mexican- American  rela- 
tions can  be  improved  are,  contrary  to  popular  opinion, 
those  in  which  the  two  governments  are  involved  not  at 
all  or  in  a  secondary  manner.  Greatly  to  be  desired  and 
fundamental,  is  the  establishment  of  a  better  apprecia- 
tion by  the  people  of  each  republic  of  the  people  of  the 
other  and  of  their  problems.  To  this  end  the  govern- 
ment can  contribute  but  little.  Americans  have  known 
foreign  lands  so  superficially  that  they  have  little  pa-' 
tience  with  a  foreign  point  of  view.  Their  increasing 
touch  with  world  affairs  will  help  to  banish  their  provin- 
cialism and  make  them  see  things  through  other  men's 
eyes  as  they  have  not  in  the  past.  They  will  learn  by 
contact  to  assimilate  the  good  in  other  civilizations  and 
develop  a  spirit  of  tolerance  not  now  a  striking  charac- 
teristic. As  this  change  occurs  Americans  will  reach  a 
new  estimate  of  Mexicans. 

The  vision  of  Mexicans  has  not  been  wider.  They 
also  have  felt  the  influence  of  the  foreigner,  but  they 
have  not  come  to  appreciate  him.  One  of  the  indirect 
beneficent  results  of  the  revolution  will  be  the  broad- 
ening of  the  national  point  of  view,  brought  about  by 


302    MEXICO  AND  ITS  RECONSTRUCTION 

the  return  of  the  many  thousands  who,  during  the 
revolution,  have  been  forced  out  of  their  own  country 
into  foreign  lands,  especially  the  United  States.  The 
new  perspective,  which  these  people  will  take  back  to 
their  home  communities,  will  not  fail  to  have  its  influ- 
ence upon  the  thought  of  others.  They  will  have  lost 
their  short-range  vision  and  will  help  their  countrymen 
to  a  new  appreciation  of  the  position  of  Mexico  in  the 
world.  From  such  changes  of  viewpoint  the  United 
States  will  profit. 

The  American  people  must  hear  a  call  to  help  Mexico 
through  philanthropic  activities.  These  depend  upon 
the  Government  of  the  United  States  only  for  such 
friendly  moral  support  as  it  may  be  able  to  extend.  Bad 
sanitary  conditions,  poor  educational  facilities,  and  other 
conditions  socially  disadvantageous — the  need  for  the 
elimination  of  these  in  Mexico  should  awaken  a  lively 
interest  on  the  part  of  the  people  of  the  United  States. 
It  has  not  done  so  heretofore.  In  spite  of  the  excellent 
efforts  made,  chiefly  with  church  support,  all  that  has 
been  done  is  only  a  beginning.  The  well  equipped  and 
efficient  philanthropic  institutions,  which  under  Amer- 
ican management  and  support  are  doing  such  splendid 
work  in  the  Far  East  and  the  Near  East,  have  no  coun- 
terpart in  the  nearer  south.  American  philanthropy 
has  not  always  heeded  the  injunction  "Do  the  duty  that 
lies  nearest  thee."  It  has  not  given  its  attention,  as  it 
should,  to  Mexico. 

In  spite  of  the  evident  present  unwillingness  of  Mex- 
ico to  admit  it,  there  is  little  doubt  that  the  United 
States  must  give  financial  assistance  to  the  government. 


MEXICAN-AMERICAN  RELATIONS    303 

[This  is  needed  not  only  to  meet  the  obligations  of  debts 
already  incurred  but  to  provide  money  to  defray  the 
expenses  of  the  educational  and  social  reforms  that  the 
government  may  very  properly  undertake  for  the  bene3 
fit  of  the  common  people.  How  far  this  financing  can 
be  accomplished  through  loans  made  on  purely  private 
initiative  can  not  be  stated.  Even  if  it  could  be  wholly 
done  thus,  it  is  doubtful  whether  that  standard  should 
be  accepted.  The  United  States  may  very  properly  do 
what  it  can  to  assure  that  Mexico  be  given  assistance 
under  conditions  that  will  be  easy  for  her  to  carry.  It 
may  also  seek  to  assure  that  its  own  citizens  shall  not 
enter  speculative  governmental  contracts,  the  attempted 
enforcement  of  which  would  be  likely  to  lead  to  inter- 
national complications.  The  alternative  which  will  be 
offered  in  Mexican  loans  will  be  high  rates  with  poor 
guarantees  for  payment  or  low  rates  and  good  guaran- 
tees. The  recent  state  of  public  opinion  in  Mexico  in- 
dicates that  her  governments  would  prefer  the  former 
standard. 

It  is  open  to  question  whether  considerations  of  good 
friendship  permit  the  only  country  whose  citizens  are 
in  a  position  to  refinance  Mexico  to  enter  contracts  such 
as  Mexico  would  be  glad  to  accept.  Whether  the  spe- 
cial guarantee,  which  might  be  given,  should  be  an  hy- 
pothecation of  certain  sources  of  public  income,  or  the 
establishment  of  a  special  customs  service,  or  some  other 
means  that  would  protect  the  right  of  the  lender,  must 
be  determined  by  circumstances  not  yet  developed.  It 
seems  Mexico  will  very  probably  show  unwillingness 
to  give  any  special  guarantee  in  return  for  financial  aid. 


304    MEXICO  AND  ITS  RECONSTRUCTION 

It  may  be  the  part  of  friendship  to  wait  until  such  un- 
willingness disappears,  rather  than  to  help  her  borrow 
money  on  conditions  which,  if  fulfilled,  may  prove  a 
drag  upon  her  economic  recovery  and,  if  not  fulfilled,  a 
threat  to  international  peace. 

But  the  financing  of  the  obligations  of  the  government 
is  not  the  only  financial  assistance  Mexico  will  need. 
The  industries  already  developed,  especially  her  public 
services,  will  need  large  amounts  of  capital  for  their 
rehabilitation  and  their  further  expansion.  Natural  re- 
sources, until  now  almost  untouched,  can  be  brought  to 
contribute  to  solving  the  problems  of  the  republic  only 
by  assistance  from  beyond  the  national  boundaries. 

These  funds  can  be  obtained  on  advantageous  terms 
only  if  the  foreigner  is  assured  by  Mexico  and  by  his 
home  government  that  the  cooperation  sought  is  not 
one  back  of  which  lies  a  narrow,  anti-foreign,  illiberal 
policy.  If  there  is  shown  a  genuine  desire  on  the  part 
of  the  Mexican  government  and  Mexican  people  to  have 
the  help  of  foreigners  in  the  development  of  the  republic 
and  if  other  states  make  clear  to  their  investing  citizens 
that  conditions  will  not  be  allowed  to  arise  in  which  they 
will  find  themselves  harassed  by  legislation  that  will 
practically  confiscate  rights  worthy  of  protection,  this 
help,  like  that  to  the  government  itself,  will  be  forth- 
coming on  favorable  terms.  Mexico  will  again  have 
the  possibility  of  becoming  a  strong  American  state. 
If,  on  the  other  hand,  the  "nationalization  movement" 
continues  to  show  the  characteristics  that  have  marked 
it  heretofore,  there  is  no  doubt  that  the  reconstruction 
of  Mexico  will  be  at  least  greatly  retarded. 


MEXICAN-AMERICAN  RELATIONS    305 

It  is  at  this  point,  when  the  financial  arrangements 
to  be  adopted  and  the  rights  of  foreigners  come  under 
discussion,  that  the  attitude  of  the  Mexican  govern- 
ment toward  national  reconstruction  becomes  most  im- 
portant. However  great  the  mistakes  of  the  Diaz  re- 
gime may  have  been,  there  can  be  little  doubt  that  the 
effort  to  improve  the  condition  of  the  country  by  bring.- 
ing  about  its  economic  development  was  wise.  The  as- 
sistance of  the  foreigner  contributed  powerfully  to  the 
creation  of  a  new  Mexico  and  the  assistance  of  the  for- 
eigner may  be  made  equally  effective  in  raising  Mex- 
ico from  the  low  estate  to  which  she  has  been  brought  by 
the  revolution. 

Those  who  now  have  in  charge  the  destinies  of  the 
republic  have  the  high  responsibility  of  bringing  that 
adjustment  of  material  and  non-material  interests  in 
which  they  believe  their  predecessors  failed.  They  must 
find  some  means  by  which  they  can  secure  the  financial 
assistance  of  the  foreigner,  without  falling  into  the 
errors  for  which  they  criticize  those  formerly  in  power. 

The  economic  foundations,  upon  which  may  rest  the 
reforms  Mexico  may  adopt,  involve  no  other  foreign 
country  as  they  do  the  United  States.  Trade  and  in- 
vestments make  the  interests  of  the  two  countries  in- 
separable. These  influences  will  accentuate  their  eco- 
nomic interdependence  and  should  draw  them  into 
closer  and  more  friendly  political  relations. 

For  the  present  there  seems  to  be  little  prospect  for 
such  an  entente  cordial.  The  revolution  in  Mexico  and 
the  efforts  of  certain  classes  of  foreigners  during  the 
World  War  have  reawakened  the  spirit  of  distrust, 


306    MEXICO  AND  ITS  RECONSTRUCTION 

which  has  so  long  made  difficult  a  political  understand- 
ing in  spite  of  unity  of  economic  interests.  The  in- 
tense nationalism  of  the  local  leaders  has  misled  them. 
They  have  been  drawn  into  an  anti-foreign  campaign, 
which  can  not  be  for  the  best  interests  of  their  country. 
They  have  set  up  the  theory  that  the  republic  shall  keep 
for  itself  entire  freedom  of  action  in  matters  political 
and  economic.  They  seek  to  put  the  foreign  resident 
and  his  property  outside  the  protection  of  his  home 
government.  Those,  whether  Mexicans  or  not,  who 
helped  to  foster  this  anti-foreign  policy  were  no  friends 
of  Mexico. 

Financially,  whether  we  consider  government  obliga- 
tions or  private  development  enterprises,  Mexico  can- 
not be  independent  in  the  way  some  of  her  recent  lead- 
ers have  desired.  The  country  she  has  called  upon  the 
most  heavily  for  capital  in  the  past  has  been  the  United 
States.  The  revolution  has  increased  the  necessity  of 
that  dependence.  Mexico  must  borrow  to  repair  the 
destruction  of  the  revolution ;  she  must  seek  an  intensive 
development  of  her  national  resources  in  order  to  secure 
means  for  paying  off  her  increased  obligations  and  for 
improving  the  social  and  industrial  life  of  her  people. 
The  World  War  has  made  it  impossible  for  her  to  se- 
cure capital  on  the  other  side  of  the  Atlantic  under  any 
conditions.  However  much  she  may  desire  to  spread 
her  borrowings,  public  and  private,  among  a  number 
of  nations,  she  will  find  that  standard  impossible. 

Little  need  be  said  to  show  that  politically  as  well  as 
economically  Mexico  should  seek  the  friendship  of  the 
United  States.  If  the  principle  that  non-American 


MEXICAN-AMERICAN  RELATIONS    307 

states  shall  not  be  allowed  to  extend  their  control  to 
the  American  republics  be  overthrown  or  abandoned, 
Mexico  would  not  improbably  be  one  of  the  first  of  the 
new  world  countries  to  suffer.  The  United  States  is 
the  chief  defender  of  the  policy  from  which  Mexico  has 
already,  in  one  instance,  profited  in  a  striking  manner 
and  by  which  her  independence  has  now  for  a  century 
been  rendered  more  secure.  Finally,  a  policy  of  enmity 
toward  the  United  States  would  of  itself  endanger  Mex- 
ican independence. 

In  considering  the  importance  of  Mexican- American 
relations  from  the  point  of  view  of  the  United  States 
the  economic  motives  are  less  important  in  themselves 
than  the  consequences  that  might  follow  the  lack  of  good 
understanding.  The  Mexican  import  and  export  trade 
is  of  great  and  growing  importance  to  the  United  States, 
as  has  already  been  shown.  Mexico  is  a  schooling 
ground  for  American  importers  and  exporters.  The 
experience  acquired  in  the  foreign  market  near  at  hand 
is  valuable  in  the  approach  to  others  more  distant.  Mex- 
ico is  the  most  important  of  the  Latin  countries  as  a 
place  for  the  investment  of  American  capital  and  it  may 
continue  to  be  so.  Nevertheless  the  interruption  of  the 
economic  connections  between  the  two  countries  would 
bring  no  such  consequences  to  the  United  States  as  it 
would  to  Mexico. 

Friendship  with  Mexico  is  more  important  to  the 
United  States  politically  than  economically.  An  enemy 
or  an  unfriendly  power  on  the  southern  boundary  would 
be  a  constant  threat  to  the  national  safety.  So  also  a 
country  that  cannot  keep  order  within  its  own  bound- 


308    MEXICO  AND  ITS  RECONSTRUCTION 

aries  and  give  protection  to  the  lives  and  property  of 
foreigners  is  a  menace  to  the  United  States  only  slightly 
less  dangerous,  because  conditions  may  arise  in  such  a 
country  which,  through  the  steps  taken  by  other  powers 
to  defend  the  interests  of  their  nationals,  may  draw  the 
United  States  into  international  conflicts. 

The  United  States,  therefore,  is  in  a  position  that  de- 
mands that  it  shall  do  all  that  is  within  its  power  to  help 
Mexico  establish  and  maintain  the  public  order  upon 
which  her  economic  salvation  depends.  Order  is  essen- 
tial for  the  rehabilitation  of  Mexico  and  for  the  protec- 
tion of  the  broader  foreign  policy  of  the  United  States; 
it  is  the  starting  point  for  all  the  other  developments 
in  Mexico  that  will  help  to  strengthen  the  position  of 
both  countries  and  assure  their  good  understanding. 

The  steps  it  may  be  necessary  to  take  to  assure  order, 
and  to  impress  upon  the  local  government  its  duty  to 
maintain  it,  may  offend  the  susceptibilities  of  those  in 
control  in  Mexico.  In  the  past  America  has  been  fright- 
ened too  often  by  such  possibilities.  There  has  de- 
veloped a  pallid  Pan- Americanism,  which  has  led  the 
United  States  too  often  to  refuse  to  do  anything  for  fear 
of  offending  a  Latin  American  country,  even  though 
by  inaction  its  own  just  interests  were  caused  to  suffer. 
If  that  is  the  price  that  must  be  paid  for  Latin  Amer- 
ican friendship,  it  is  not  worth  the  price.  In  fact,  no 
such  condition  exists.  The  Latin  is  moved  by  the  same 
motives  that  prompt  other  peoples.  A  nation  whose 
foreign  policy  is  characterized  by  a  firm  insistence  on 
respect  for  its  citizens'  rights  never  sacrifices  the  re- 
spect of  other  nations — even  the  respect  of  those  against 


MEXICAN-AMERICAN  RELATIONS    309 

whom  the  action  is  taken.  A  national  policy  that  insists 
upon  the  prompt  and  generous  fulfillment  of  inter- 
national duty  in  the  protection  of  foreigners  and  in  pay- 
ment for  damages  done  them  is  one  that  will  do  more 
to  make  America  respected  among  the  other  nations  of 
the  New  World  than  will  one  whose  chief  feature  is  the 
exchange  of  courtesies  in  which  hard  facts  are  glossed. 
Its  influence  will  extend  beyond  our  narrower  national 
interests,  because  it  will  make  those  upon  whom  de- 
mands are  made  conscious  of  the  responsibilities  that 
accompany  their  international  "equality"  and  spur  them 
on  to  make  it  less  a  fiction. 

There  is  no  one  element  which,  in  the  relations  of  the 
two  more  important  republics  of  North  America,  is  suf- 
ficient, if  emphasized,  to  bring  the  good  understanding 
that  should  exist  between  them.  Nor  can  the  good  un- 
derstanding be  brought  through  official  action  only. 
The  people  of  both  countries  must  forget  certain  of  their 
prejudices.  The  stronger  nation  must  feel  the  call  to 
help  the  weaker  through  both  private  and  public  initia- 
tive. It  must  help  raise  Mexico  to  a  condition,  social 
and  economic,  in  which  it  can  help  itself.  This,  Mexico 
can  not  do  alone.  The  weaker  nation,  on  its  side,  must 
recognize  the  responsibilities,  as  well  as  the  privileges,  of 
independence.  Toward  those  who  have  helped  and 
those  who  will  be  called  upon  in  the  future  to  help  in 
the  development  of  the  country,  the  government  must 
show  its  good  will  by  assuring  them  effective  protection 
and  by  respecting  the  engagements  they  have  entered. 

Given  a  policy  with  these  characteristics,  there  is  no 
reason  to  believe  that  the  relations  between  Mexico  and 


310    MEXICO  AND  ITS  RECONSTRUCTION 

the  United  States  may  not  become  increasingly  inti- 
mate and  friendly.  Economic  and  political  cooperation 
will  then  be  possible  in  a  positive  way.  It  has  been  pos- 
sible heretofore  only  in  spite  of  lack  of  understanding 
on  the  part  of  both  peoples  and  in  spite  of  failure  to 
realize  their  unity  of  interests.  Cooperation  and 
interdependence  must  succeed  the  distrust  and  "in- 
dependence," so  prominent,  often,  in  the  past.  If  Mex- 
ico is  strong  and  "independent,"  in  the  broader  sense 
of  that  word,  she  will  be  a  friend  of  the  United  States, 
an  ally  in  the  defense  of  the  principles  in  foreign  policy 
for  which  the  United  States  stands,  and  a  bulwark 
against  possible  attack  from  the  south.  These  she  will 
be  from  principle  and  because  her  own  best  interests 
demand  it.  For  the  best  interests  of  the  United  States 
no  other  standard  of  action  is  necessary.  A  friendly, 
strong,  and  independent  Mexico  will  bring  greater  eco- 
nomic advantages  than  the  annexation  that  certain 
classes  of  Mexicans  fear  and  some  citizens  of  the  United 
States  desire.  It  would  contribute  more  to  American 
political  security.  A  friendly  neighbor  is  a  better  bul- 
wark than  a  disaffected  province. 

The  arguments  for  a  cordial  understanding  between 
Mexico  and  the  United  States  are  so  compelling  that 
it  is  hard  to  believe  that  they  will  be  disregarded  by  those 
who  guide  the  fortunes  of  the  two  republics.  Without 
a  strong  and  safe  United  States,  Mexico  can  not  be 
strong  nor  can  its  independence  be  assured.  If  Mexico 
is  a  weak  and  hostile  nation,  the  United  States  is  not 
safe,  and  an  essential  of  the  foreign  policy  of  all  Amer- 
ican states  is  rendered  less  secure. 


A  SELECT  LIST  OF  MATERIALS  RELATING 
TO  MEXICO 

BOOKS 

ANASAGASTI,  Victorio  de,  Mexico  reconquista  sus  libertades,  Madrid, 
1918.  A  eulogy  of  Carranza  and  the  revolution. 

ANDRADE,  Luis,  Mexico  en  Espana,  Madrid,  1919-  A  series  of  eulo- 
gies of  certain  revolutionary  leaders. 

ARNAUD,  M.  P.,  L'emigracion  et  le  commerce  franc,  ais  au  MexiquG 
Paris,  1902. 

BANCROFT,  H.  H.,  History  of  Mexico,  New  York,  1914. 

BELL,  Edward  I.,  The  Political  Shame  of  Mexico,  New  York,  191#. 

BRINSMADE,  R.  B.,  El  latifundismo  Mexicano,  Mexico,  1916.  An 
uncritical  discussion  of  the  Mexican  land  problem. 

BULNES,  Francisco,  The  Whole  Truth  About  Mexico,  New  York, 
1916.  A  somewhat  pessimistic  view  of  Mexican  affairs  by  one 
of  the  ablest  of  Mexican  scholars. 

BUTMAN,  Arthur  B.,  Report  on  Trade  Conditions  in  Mexico.  Trans- 
mitted to  Congress  in  compliance  with  the  Act  of  May  22,  1908, 
authorizing  investigations  of  trade  conditions  abroad,  Wash- 
ington, 1908. 

BUTTERFIELD,  Carlos,  United  States  and  Mexico,  Commerce,  Trade 
and  Postal  Facilities  Between  the  Two  Countries,  Washing- 
ton, 1861. 

CALDERON  DE  LA  BARCA,  Madame,  Life  in  Mexico,  3rd  ed.,  New 
York,  1910.  Though  originally  appearing  a  generation  ago 
this  is  still  one  of  the  most  charming  discussions  of  Mexican 
life. 

CALERO,  Manuel,  The  Mexican  Policy  of  President  Woodrow  Wil- 
son as  it  appears  to  a  Mexican,  New  York,  1916.  A  trenchant 
criticism  of  the  policy  of  the  American  Government. 

and  others,  Ensayo  sobre  la  reconstruccion  de  Mexico,  New 

York,  1920.     An  excellent  analysis  of  Mexican  conditions. 

CARSON,  W.  E.,  Mexico,  the  Wonderland  of  the  South,  New  York, 
1914. 

311 


312  BIBLIOGRAPHY 

CASTRO,  Lorenzo,  The  Republic  of  Mexico  in  1882,  New  York, 
1882. 

CREELMAN,  James,  Diaz,  Master  of  Mexico,  New  York,  1912. 

CUBAS,  Antonio  Garcia,  Mexico,  Its  Trade,  Industries,  and  Re- 
sources, Mexico,  1893.  A  good  review  of  conditions  in  the 
middle  Diaz  regime. 

— —and  HENDERSON,  Geo.  F.,  The  Republic  of  Mexico  in  1876. 

ENOCH,  C.  R.,  Mexico,  London,  1909. 

FORNARO,  C.  de,  and  others,  Carranza  and  Mexico,  New  York, 
1915.  An  ultra-radical  anti- American  discussion. 

FORNARO,  C.  de,  Diaz,  Czar  of  Mexico,  New  York,  1909- 

FLANDRAU,  Charles  Macomb,  Viva  Mexico,  New  York,  1908. 

GUNTHER,  Erich,  Handbuch  von  Mexico,  Leipzig,  1912.  A  careful 
study  of  Mexican  conditions  at  the  end  of  the  Diaz  regime. 

HAGAR,  George  J.,  Plain  Facts  About  Mexico,  New  York,  1916. 

HUMBOLDT,  Alexander  de,  Political  Essay  on  the  Kingdom  of  New 
Spain,  4  vols.,  London,  1811.  The  most  comprehensive  review 
of  Mexican  conditions  at  the  close  of  the  colonial  regime. 

HUTCHINSON,  Lincoln,  The  Panama  Canal  and  International  Trade, 
New  York,  1915. 

LUMMIS,  C.  F.,  The  Awakening  of  a  Nation;  Mexico  of  To-day, 
New  York,  1898. 

MACHUGH,  R.  J.,  Modern  Mexico,  London,  1914. 

McCALEB,  W.  F.,  The  Public  Finances  of  Mexico,  New  York,  1920. 
The  most  comprehensive  review  of  this  subject  in  English. 

Present  and  Past  Banking  in  Mexico,  New  York,   1920.     A 

well  written  historical  analysis  of  Mexican  banking  with  a  dis- 
cussion of  the  treatment  of  the  banks  by  the  revolutionary 
leaders. 

MANERO,  Antonio,  El  antiguo  regimen  y  la  revolucion,  Mexico,  1911. 

MANERO,  Vicente  E.,  Documentos  interesantes  sobre  colonizacion, 
Mexico,  1878.  A  collection  of  various  official  memorias  on 
this  subject. 

Noticias  historicas  sobre  el  comercio  exterior  de  Mexico,  desde 
la  conquista  hasta  el  ano  de  1878,  Mexico,  1879- 

MAQUEO  CASTELLANOS,  E.,  Algunos  problemas  nacionales,  Mexico, 

1909. 

MARTIN,  P.  F.,  Mexico  of  the  Twentieth  Century,  New  York. 
Mexico's  Treasure  House,  New  York,  1906. 


BIBLIOGRAPHY 

Mexican  Company,  Extracts  from  the  report  of  Justus  Ludwig  von 
Uslar,  relative  to  the  "Negotiation"  of  Yavesia  in  the  state 
of  Oaxaca,  January  6,  1828,  n.  p. 

Mexican  Yearbook,  1908-13. 

MOSES,  Bernard,  Railway  Revolution  in  Mexico,  Berkeley,  Cali- 
fornia, 1905.  An  excellent  brief  monograph. 

NIMMO,  Joseph,  Jr.,  Commerce  Between  the  United  States  and  Mex- 
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NOLL,  Arthur  H.,  A  Short  History  of  Mexico,  Chicago,  1910. 

OBREGON,  T.  Esquivel,  Influencia  de  Espana  y  los  Estados  Unidos 
sobre  Mexico,  Madrid,  1918.  A  discussion  of  the  inapplica- 
bility of  American  political  standards  in  Mexico. 

OROZCO,  M.,  Observaciones  sobre  la  influencia  del  comercio  extran- 
jero  en  la  industria  national  y  la  conveniencia  de  restrinjirlo 
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O'SHAUGHNESSY,  Edith,  A  Diplomat's  Wife  in  Mexico,  New  York, 
1916. 

PERIGNY,  Maurice  de,  Les  Etats-Unis  du  Mexique,  Paris,  1911.  A 
good  review  of  the  accomplishments  of  the  Diaz  regime. 

POINSETT,  Joel  Roberts,  Notes  on  Mexico,  Accompanied  by  an  His- 
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POMBO,  Luis,  Mexico:  1876-1892,  Mexico,  n.  d. 

ROA,  F.  Gonzalez,  The  Mexican  People  and  Their  Detractors,  New 
York,  1916. 

ROMERO,  Matias,  Mexico  and  the  United  States,  New  York,  1898. 
One  of  the  best  reviews  of  Mexican  conditions  by  a  Mexican 
author. 

SAPPER,  Dr.  Karl,  Wirtschaftsgeographie  von  Mexico,  n.  p., 
1908.  A  very  well  written  work. 

SIERRA,  Justus,  Editor,  Mexico,  Its  Social  Evolution,  Mexico,  1900- 
4.  A  large  and  well  printed  collection  of  essays  by  various 
authors  concerning  the  conditions  of  Mexico  at  the  opening 
of  the  twentieth  century. 

SINGER,  J.,  Die  Mexicanischen  Finanzen  und  Wesens.  Panamerikan- 
ische  Politik,  Berlin,  1914. 

SMITH,  R.  W.,  Benighted  Mexico,  New  York,  1916. 

STEPHAN,  Charles  H.,  Le  Mexique  economique,  Paris,  1903. 

STARR,  Frederick,  Mexico  and  the  United  States,  Chicago,  1914. 


314  BIBLIOGRAPHY 

THOMPSON,  Wallace,  The  People  of  Mexico,  New  York,  1921.  An 
excellent  sociological  study  of  the  Mexican  people. 

TROWBRIDGE,  E.  D.,  Mexico  To-day  and  To-morrow,  New  York, 
1919.  Emphasizes  the  developments  during  the  revolution,  in 
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TURNER,  John  Kenneth,  Barbarous  Mexico,  Chicago,  1910. 

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WHITNEY,  Caspar,  What's  the  Matter  with  Mexico,  New  York, 
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WINTON,  G.  B.,  Mexico  To-day,  New  York,  1913. 

PERIODICALS,  PAMPHLETS,  AND  DOCUMENTS 

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Berichte  iiber  Handel  und  Industrie,  Band  11,  Berlin,  1907;  Band 
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Boletines  de  la  direccion  general  de  estadistica,  Mexico. 

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British  Consular  Reports  passim,  especially  numbers  3726,  3733, 
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BIBLIOGRAPHY  315 

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CARRANZA,  Venustiano,  "Report  to  Constitutional  Congress  at 
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Commercial  America — in  1907,  Washington,  1909. 

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DABNEY,  Charles  William,  "A  Star  of  Hope  for  Mexico,"  pamphlet 
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Exposition  de  la  secretaria  de  hacienda  de  los  Estados  Unidos 
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FALL,  A.  B.,  Speech  in  Congressional  Record,  vol.  51,  part  5,  p. 
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316  BIBLIOGRAPHY 

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House  Document  No.  145,  part  5,  58th  Congress,  3rd  Session,  In- 
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in  Mexico. 

HUERTA,  Victoriano,  "The  Future  of  Mexico,"  Independent,  vol.  82, 
p.  202,  May  3,  1915. 

HULINGS,  W.  J.,  Speech  in  Congressional  Record,  vol.  51,  part  5, 
p.  5141,  March  19,  1914. 

HYDE,  George  Edward,  "A  Plain  Tale  from  Mexico,"  New  Repub- 
lic, vol.  2,  p.  38,  February  13,  1915. 

Informes  y  documentos  relativos  a  comercio  interior  y  exterior,  agri- 
cultura  e  industries,  Mexico,  1885-7.  A  series  containing  the 
most  important  government  reports  on  Mexican  labor  condi- 
tions. 

"Investigation  of  Mexican  Affairs."  Hearing  before  a  sub-com- 
mittee of  the  Committee  on  Foreign  Relations,  United  States 
Senate,  66th  Congress,  1st  Session,  pursuant  to  S.  Res.  105, 
Washington,  1919. 

JENNER,  G.,  "Report  on  Investments  for  British  Capital  in  Mex- 
ico," Great  Britain.  Diplomatic  and  Consular  Reports,  Com- 
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JEROME,  L.  J.,  British  Diplomatic  and  Consular  Reports,  Mexico, 
1906,  p.  3726. 

Journal  of  the  American  Chamber  of  Commerce  of  Mexico,  vols.  1 
and  2,  1918-19- 

KELLOGG,  Frederic  R.,  "The  Mexican  Oil  Problem,"  Nation,  Octo- 
ber 5,  1918. 


BIBLIOGRAPHY  317 

LANCE,  R.  O.,  "Red  Book — Mexico  To-day  and  Our  Position  and 
Responsibility  as  a  Nation  Regarding  Conditions  in  that  Coun- 
try," San  Antonio,  Texas,  1915. 

LAWRENCE,  David,  "Mexico  Rebuilding,"  Independent,  July  28, 
1917. 

"The  Inevitable  Trend  in  Mexico,"  Century,  vol.  90,  n.  s.  68, 

p.  737,  September,  1915. 

LOBO,  Gustavo,  "More  Light  on  Mexico,"  Unpopular  Review,  vol. 
4,  p.  140,  July,  1915. 

MASON,  Gregory,  "Mexico  from  the  Inside  Looking  Out,"  Outlook, 
May  10,  1916. 

MASON,  Alfred  Bishop,  "The  Cause  of  Revolution  in  Mexico,"  Un- 
popular Review,  vol.  S,  April,  1915. 

Memoria  de  hacienda  y  credito  publico,  correspondiente  al  ano 
economico  de  1  de  julio  de  ,  a  30  de  junio  de  ,  Mex- 
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among  the  best  material  of  a  statistical  nature  published  by 
the  government -during  the  Diaz  regime.  They  are  published 
at  irregular  dates  after  1878. 

"Mexico,  a  Financial  Handbook,"  The  Mechanics  and  Metals  Na- 
tional Bank  of  the  City  of  New  York,  New  York,  1917. 

Monthly  Trade  and  Consular  Reports,  Washington,  passim. 

MOSES,  Bernard,  "Government  in  Spanish  America,"  American 
Political  Science  Review,  vol.  8,  p.  208,  May,  1914. 

NASON,  Frank  Lewis,  "Political  Mexico  To-day,"  Yale  Review, 
n.  s.  1.,  p.  594,  July,  1912. 

OWEN,  Robert  L.,  Speech  in  Congressional  Record,  vol.  51,  part  9, 
p.  8517,  May,  1914. 

Papers  Relating  to  the  Foreign  Relations  of  the  United  States, 
Washington.  This  series  gives  a  fuller  account  of  diplomatic 
relations  between  the  two  republics  in  the  earlier  than  in  the 
later  years. 

PEPPER,  Charles  M.,  "Report  on  Trade  Conditions  in  Mexico,"  De- 
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Protection  of  Landed  Estates  of  American  Citizens  in  Mexico,  Sen- 
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318  BIBLIOGRAPHY 

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Rapports  commerciaux  des  agents  diplomatique 'S  et  consulaires  de 
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Paris. 

REID,  Frederick,  "Must  We  Clean  Up  Mexico?"  Sunset,  vol.  36,  p. 
27,  February,  1916. 

Review  of  Reviews,  vol.  50,  p.  630,  November,  1914. 

ROLLAND,  M.  C.,  "A  Trial  of  Socialism  in  Mexico,"  Forum,  vol.  56, 
p.  79,  July,  1916. 

ROMERO,  Matias,  "Wages  in  Mexico,"  Commercial  Information  Con- 
cerning the  American  Republics  and  Colonies,  1891,  Bulletin 
No.  41,  Washington,  April,  1892. 

ROOSEVELT,  Theodore,  "Our  Responsibility  in  Mexico,"  New  York 
Times,  December  6,  1914. 

ROWE,  L.  S.,  "Administrative  Centralization  in  Mexico,"  Yale  Re- 
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"Sisal,"  bulletin  published  by  the  Comision  Reguladora  del  Mer- 
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STEFFENS,  Lincoln,  "Making  Friends  with  Mexico,"  Collier's,  No- 
vember 25,  1916. 

TRICHLER  Y  CORDOVA,  Martin,  "Constitutional  Persecution  of  the 
Church,"  Outlook,  vol.  114,  p.  558,  November  8,  1916. 

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American  Review,  vol.  205,  p.  398,  1917. 

WILFLEY,  L.  R.,  "The  Land  Problem  in  Mexico,"  North  American 
Review,  vol.  203,  p.  867,  1916. 

WOLFE,  A.  J.,  "Foreign  Credits,"  Department  of  Commerce  and 
Labor,  Bureau  of  Manufactures,  Special  Agents  Series,  No. 
62,  Washington,  1913. 

YOUNG,  Arthur  N.,  "Finances  of  the  Federal  District  of  Mexico," 
Mexico,  1918. 

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19,  1914. 

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BIBLIOGRAPHY  319 

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1916. 

-"The  Mexican  Oil  Question/'  with  documents  and  transla- 
tions, n.  p.  n.  d.  A  compilation  of  extracts  from  Mexican  de- 
crees, constitutions,  laws,  and  diplomatic  notes  protesting 
against  the  action  of  Mexico  as  to  oil  properties. 

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tember 20,  1915. 

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18,  1916,  published  in  extension  of  remarks  by  Jefferson  Mc- 
Lemore  in  Congressional  Record,  vol.  53,  part  15,  p.  1564, 
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425-30,  August,  1916. 


INDEX 


Acapulco,  and  foreign  commerce, 
191 

Aguascalientes,     population     of, 
12 

Agricultural  machinery,  import- 
ed from  United  States, 
194,  202 

Agriculture  in  Mexico,  develop- 
ment of,  184,  185,  207, 
237 

during  revolution,  184 
since  year  1918,  185 

Alcabala,  96,  97,  99,  192 

Americans  in  Mexico,  25,  26, 
233-236,  239-270 

American-Mexican      relations, 

263,  271-310 
See   also   United    States. 

American  policy  toward  Mexico, 

4-9 
See  also  United  States. 

Antunano,  Esteban,  and  cotton 
weaving,  177 

Asia,  Mexican  trade  relations 
with,  190 


Bandelier,  Adolph  F.,  estima- 
tion of  wages  of  farm 
laborer  in  year  1884,  by, 
135 

Banking  system  of  Mexico,  83- 

93 
present  status  of,  92 

Bilimbiques,  86 

Brandy,  production  of,  in  Mex- 


ico, 179 


321 


Breadstuffs  exported  from 
United  States  to  Mexico, 
194 

Breweries,  in  Mexico,  179 


Cabrera,  Luis,  75 
Cabrera  (Minister),  89 
Calero,  Manuel,  295 
Camarilla    stage   of   government 

in  Mexico,  36 

Campeche,  population  of,  16 
Candy    and    chocolate    factories 

in  Mexico,   178 

Canned  provisions  exported 
from  United  States  to 
Mexico,  194 

Carranza,  39,   51,   52,   74 
"bilimbiques"  issued  by,  86 
coinage  system  under,  85-87, 

89,  90 

customs   receipts   under,  217 
death  of,  53 

foreign  capital  and,  251-261 
loans  contracted  by,  72,  75,  76 
labor  problem   under,   142 
Catholics  in  Mexico,  21 
Cattle,  hides  and  skins  exported 

from    Mexico,    210 
Cattle   industry  in   Mexico,   184 
Chamizal  controversy,  298 
Chemical    products,    importation 

of,  by  Mexico,  202 
Chiapas,  population  of,  11,  16 
Chicle  exported  from  Mexico,  210 
Chihuahua,  population  of,  26 
Chinese  in  Mexico,  26 


322 


INDEX 


Church    as    political    factor    in 

Mexico,  21 

Coahuila,  population  of,  13,  26 
Coal: 

effect   of   lack   of   supply   on 

industry  in   Mexico,   180 

importation    of,   into    Mexico, 

202 
Cochineal,  exportation  of,  from 

Mexico,   191,   195 
Cochineal  industry  during  nine- 
teenth century  in  Mexico, 
176 
Coffee: 

crop  of,  in  Mexico,  184,  208, 

210 
exportation  of,   from  Mexico, 

197 
Cocoa    exported    from    Mexico, 

191 
Coinage    system,    Mexican,    83- 

93 

during  Diaz  regime,  84 
effect  of  World  War  on,  90 
relation  of,  to  taxing  system, 

84 
Coke,  Governor  of  Texas,  and 

Mexican  relations,  277 
Colonization  enterprises  of  Mex- 
ico, 220-238 
"concessions"   and,  240 
Germans  and,  245 
Commerce,  Mexican,  foreign,  be- 
fore   Diaz    regime,    187- 
198 

exports  of  metals,  189 
effect  of,  on  economic  devel- 
opment, 192 
exports,  189-198 
imports,  189-191,  193-198 
smuggling,   193 
Spanish    trade    regulations 

for  Mexico,  187,  190 
statistics  regarding,  192 
steamship    communications, 
198 


Commerce,  Mexican,  foreign: 
tariff  system,  192-194 
Vera     Cruz     as     shipping 

center,   189 
with  Asia,  190 
with  Philippines,  190 
during  and  after  Diaz  re- 
gime, 199-219 

effect  of  World  War  on,  217 
exports,  202-217 
imports,  199-206,  217 
tariff  system,  199-202 
Commerce,     Mexican,     internal, 

175-186 

See  also  Industry  and  Inter- 
nal Commerce  of  Mexico. 
Constitution   of  year   1857,   30- 

32,  253 
Constitution  of  year  1917,  144, 

253-256,  264,  265 
Copper : 

importation   of,   into    Mexico, 

68,  202 
exportation  of,  from  Mexico, 

189 

Corral,  49 
Cotton : 

exportation  of,  189 
importation   of,   201 
manufacture  of,  193 
Cotton  weaving  in  Mexico,  176, 

177 

and  Esteban  Antunano,  177 
Crops,  production  of,  in  Mexico, 

216 
Cubans  in  Mexico,  26 


Diaz — Madero  election,  49 
Diaz  regime,  32,  33,  35,  36,  38, 
43,    44,    46,    47,   48,    49, 
50,   53,  60 
and    colonization    concessions, 

241,  249 

attitude    of,    toward     United 
States,  279-296 


INDEX 


323 


Diaz  regime: 

beginning  of,  277 
coinage  system  during,  84 
colonization  during,  231 
commerce,      foreign,      before, 

187-198 
commerce,       foreign,      during 

and  after,   199-219 
Congress  during,  39 
courts  during,  40 
division  of  Mexico  into  zones 

during,  13 
financial   condition   during,   5, 

66,  67,  97,  100,  101 
financial  standing  at  close  of, 

74 
foreigners   as   factor   in  trade 

during,  183 
labor  conditions    during,    11 6, 

124-126,    129,    130,    131, 

134,   138 
large    estate    system    during, 

155 

lawlessness  during,  276 
military  problems  during,  33- 

35 

position  of  jefes  politicos  dur- 
ing, 63 
railroad  project  during,   163- 

166  168-171,  174 
effect  of,  on  economic  con- 
ditions, 169,  174 
tariff  rates  during,  194,  200 
taxing  system  during,  100 


Education  in  Mexico,  22-24,  27 
Elections,  Mexican,  42-57 
Electrical  goods,  importation  of, 

into  Mexico,  202 
Electrical  power  development  in 

Mexico,  179 

English  settlers  in  Mexico,  25 
European  powers: 

attitude  of,  toward  Haiti,  pre- 
ceding the  World  War,  8 


European  powers: 

financial      interests      of,      in 

Mexico,  8 
External       Consolidated      Gold 

Loan,  69 


Finance,  Mexican,  66-103 
at  close  of  Diaz  regime,  74 
at  outburst  of  World  War,  72, 

79 
banking  system,  83-93 

present  status  of,  92 
domestic  obligations,  83 
domestic  readjustment  in  the 

early   '90's,   88 
foreign  claims,  66-82 
foreign  commerce,  98 
foreign  loans,  66-68 
present   condition    of,    73-83, 

93 

public    income    and    expendi- 
ture, 94-103 
during  Diaz  regime,  101 
railroad  building  for  further- 
ing of,  98 
See    also    Taxing    System    in 

Mexico 
Fish,    Secretary    of    State,    and 

Mexican  relations,  277 
Fletcher,  Henry,  American  Am- 
bassador to  Mexico,  270 
Foreign    population   of   Mexico, 

25 

lack    of    accurate    census    re- 
garding, 25 
Foster,  Minister,  282 
Flour     exported     from     United 

States  to  Mexico,   194 
Foodstuffs: 

importation    of,   into    Mexico, 

201 

production  of,  in  Mexico,  201 
Foreigners  in   Mexico: 

capital  invested  by,  239-252 
total  amount  of,  247 


324 


INDEX 


Foreigners  in  Mexico: 
immigration  of,  233-236 
legal  status  of,  252-270 
property     of,     230-252,     256- 

258 

confiscation  of,  260 
Foreign  investments  in  Mexico: 
by  Americans,  242-244,  247 
by  British,  244-247 
by  French,  245-247 
by  Germans,  245-248 
France: 

capital  of,  invested  in  Mexico, 

245-247 

Mexican    trade    relations    with, 
193,    194-195,    196,   200, 
203 
property  of,  in  Mexico,  245 

confiscation  of,  260 
French    population    in    Mexico, 
25,  26 


Garbanzos,  exported  from  Mex- 
ico, 210 

Garcia,  Jesus,  288 
German   population   in    Mexico, 

25,  26 
Germany: 

capital   of,   invested   in   Mex- 
ico,  245-248 
colonization    interprises    and, 

245 

trade  relations  of,  with  Mex- 
ico, 194,  195,  200,  203 
Glass   and    faience    factories   in 

Mexico,  176 

Gold  exported  from  Mexico,  189 
Gonzalez,  50,  52 
Government  of  Mexico,  28-85 
camarilla  stage,  36 
conservative  party  in,  42-44 
constitution  of  year  1857,  30- 

32,  253 

constitution  of  year  1917,  144, 
253-256,    264,    265 


Government  of  Mexico: 

during     Diaz     regime.       See 

under   Diaz   regime, 
elections,  42-57 
executive,  28-41 
judicial,  30,  40 
legislative,  29 
Liberal  party  in,  43,  44 
local,  58-65 

town     council      (ayuntami- 

ento*),  62 

military   problems,  33-35 
State   governments,   58-65 
taxing    system.      See    Taxing 

System  of  Mexico. 
Great  Britain: 

capital  of,  invested  in  Mexico, 

244,  247 

Mexican  trade  relations  with, 
193,  194,  195,  196,  200, 
203,  211 

property  of,  Mexican  confis- 
cation of,  260 

Greek  Orthodox  in  Mexico,  22 
Groceries,  trade  in,  in  Mexico, 

182,  194 

Guatemalans  in  Mexico,  26 
Guayule,  exported  from  Mexico, 

210 
Guerero,  population  of,  16 


Hacendados,  139 

Haiti,     attitude     of     European 

powers  toward,  preceding 

the  World  War,  8 
Hardware  trade  in  Mexico,  183, 

194 
Hats,     exported     from     Mexico, 

211 
Henequen,  exported  by  Mexico, 

208 
Hides    exported    from    Mexico, 

189,  197 
Holland,   property   of,   Mexican 

confiscation  of,  260 


INDEX 


325 


Huerta,  50,  51,  53,  74, 

labor  legislation  and,   142 
Hughes,  Secretary  of  State,  and 

Mexican    relations,    264 
Humboldt,  Alexander  von: 
estimation  of  Mexican  popu- 
lation by,   12 

estimation  of  wages  of  agri- 
cultural laborer  in  year 
1804  by,  135 


Indian  tribes  in  Mexico,  16 
Indigo    exported    from    Mexico, 

189 

Indigo     industry     during     nine- 
teenth century  in  Mexico, 

176 
Industry  and  internal  commerce 

of  Mexico,  175-186 
agriculture,  184,  185 
brandy,  179 
breweries,  179 
candy  and  chocolate  factories, 

178 

cattle  industry,  184 
cochineal,    during    nineteenth 

century,  176 
coffee  crop,  184 
coining  of  silver,  175 
cotton  goods,  176,  177,  178 
effect   of   development   of   oil 

regions  on,  180 
effect    of    lack    of    coal    on, 

180 
effect  of  re-adoption  of  gold 

standard  on,  186 
effect  of  revolution  on,  185 
electrical  power  development, 

179 
foreigners  as  a  factor  in,  181- 

183 
glass    and    faience    factories, 

176 

groceries,   182 
hardware,  183 


Industry  and  internal  commerce : 
indigo,  during  nineteenth  cen- 
tury, 176 

inducements    offered    by    the 
government  in  nineteenth 
century,  176 
influence  of  foreign  trade  on, 

180-182 

iron  and  steel,  182 
jewelry,  182 
jute,   178 
liquor  trade,  182 
machinery  and  machinery  sup- 
plies,  183 

Mexico  City  as  center  of,  184 
mining,  185,  195 
present  status  of,  183 
printing  establishments,  176 
rum,  178 
silks,  176,  182 
silver,  175,  185 
stock-raising,  184 
sugar,  178,  184 
textile     manufacturing,     175- 

178 

centers  of,  176 
tobacco  manufacture,  179*  185 
woolen  goods,  176,  178 
Infalsificable  notes,  86,  89 
Iron,  exportation  of,  from  Mex- 
ico, 202 
Iron  and   steel,  importation  of, 

into  Mexico,  194,  202 
Iron     and     steel     industries     in 

Mexico,  182 
Iron  goods,  importation  of,  into 

Mexico,  203 
Israelites  in  Mexico,  22 


Jalisco,  population  of,   14 
Jefes  politico*,  63 

during  Diaz  regime,  63 
Juarez,  43 

second  election  of,  50 
Jute  manufacturing,  178 


326 


INDEX 


Labor  contract  in  Mexico,  112- 

134 
Labor  problem  in  Mexico,  104- 

160 

aboriginal  races  and,  112 

and  the  revolution,  144-147 

baldios  and,   120 

by  tarea  system,   128 

during  Diaz  regime,  11 6,  124- 

126,   129,   130,   131,   134, 

138 

faena  and,  122 
foreigners  and,  110 
government  statistics  on,  11 6, 

130 

rate  of  wages,  135 
hacendados  and,  125,  134,  143 
Indians    and,    106-109,    111, 

112,  121,  126-128 
labor    union    movement,    140- 

142,  146 
legislation  in  connection  with, 

123,  127,  143 

mestizo  class,  109,  HI,  112 
peonage     system,     115,     117, 

121,  129,  130,  133 
pulque  trade  and,  143 
punteros  and,  121 
ray  a  and,  122 
socorro  and,  122 
tarea  and,  122 
task  laborers,  122 
term  contracts,  117-120,  122 
wage  rates,  118-120,  122,  126, 

128,  131,  135-147 
effect    of    World    War    on, 

140 

for  children,  137,   143 
for  females,  137,  143 
for  males,  137,   143 
working  hours,  118,  143 
Laborer,  Mexican,  104-160 
contract  of,   112-134 
demands  of,  112-134 
See    also    Labor    Problem    in 
Mexico. 


Land  problem  in  Mexico,   148- 

160 

Languages  of  Mexico,  18,  19 
Maya,    19 
Mexicanos,  19 
Nahuatl,  19 
Otomi,  19 
Spanish,   19 
Zapotecano,  19 
La  Novia,  revolution  of,  43 
Lard,  importation  of,  into  Mex- 
ico, 201 

Latin-American    countries,    atti- 
tude of  United  States  to- 
ward, 6 
Leather   goods,   importation   of, 

into  Mexico,  201 
Lerdo,  43,  50 
Leyes  de  Deslindes,  152 
Lill,  Thomas  R.,  74 
Liquors,    trade    in,    in    Mexico, 

182,  194 

Literacy  of  Mexicans,  22-24,  27 
census  statistics,  22-24 


Machinery : 

exported  from  Mexico,  194 
imported  by  Mexico,  202 
Machinery  trade,  control  of,  by 
Americans,     in     Mexico, 
183 
Madero  regime: 

financial      condition      during, 

74 

labor  problem  and,  142 
Maximilian,  regime  of: 
colonization  during,  245 
floating  of  loan  in  year  1864 

by,  68 

Maya,  language  of,  19 
Mayas,  11 
Meats,  preserved,  importation  of, 

into  Mexico,  201 
Mestizo   population   in   Mexico, 


INDEX 


327 


Metal  goods  exported  from  Mex- 
ico, 194,  195 
Metals : 

exported    from    Mexico,    202, 

205,  210 
importance  of,  as  resource  in 

Mexico,  189 
Mexican-American  relations,  49, 

72,  263,  271-310 
See  also  Mexico. 
Mexican  "Border,"  271-296 
Mexican  finance,  66-103 

See  also  Finance,  Mexican. 
Mexican  laborer,  104-160 

See  also  Labor,  Mexican. 
Mexicano,  19 

Mexicans  in  United  States,  273 
Mexico : 

attitude  of  United  States  to- 
ward, 4-9,72,  279-310 
colonization     enterprises     of, 

220-238 

commerce,      foreign,      before 
Diaz  regime,  187-198;  see 
also   Commerce,   Mexican 
during  and   after   Diaz   re- 
gime,   199-219;    see    also 
Commerce,  Mexican, 
with  United  States,  impor- 
tance of,  6 

commerce,  internal,  and  indus- 
try, 175-186;  see  also  In- 
dustry and  Internal  Com- 
merce of  Mexico 
economic  development  of,  5,  7, 

10,  11,  40 

effect    of    agricultural    ex- 
perimental work  on,  237 
effect    of    agricultural    ex- 
ports  on,   208-210 
effect   of   American   invest- 
ments on,  242-244 
effect    of     exportation     on, 

207-214 

effect    of    importation    on, 
214 


Mexico,  economic  development: 
effect  of  labor  problem  on, 

104-185 
effect  of  manufacturing  on, 

175-186 
effect   of   political   problem 

on,  112,  170 

effect  of   railroads   on,   169 
effect  of  tariff  on,  199 
foreigners     in,    239-270;     see 
also  Foreigners  in   Mex- 
ico. 

government  of,  28-85 
industry  and  internal  com- 
merce of,  175-186;  see 
also  Industry  and  In- 
ternal Commerce  of  Mex- 
ico. 

languages  of,  18,  19 
municipal  government  of,  58- 

65 

natural  wealth  of,  5 
population  of,  10-27 
present  status  of  civilization 

in,  5 
racial  development  of,  14-16 

among  Indian  tribes,  16 
resident  international  interests 

within,  5,  10 
social  status  of,  11,  17 
transportation     facilities     in, 

161-174 

Mexico  City,  as  center  of  com- 
merce   184 

Michoacan    oooulation  of,  14,  16 
Mining  in  Mexico,  185,  195 
Mineral  products  exported  from 

Mexico,  205 
Minerals,    importation    of,   into 

Mexico,  202 
Miztecs,  16 

Mohammedans  in  Mexico,  22 
Monterey    and     Mexican     Gulf 

Railway,  69 

Municipal  government  of  Mex- 
ico, 58-65 


328 


INDEX 


Nahuatl,  19 

National  Railways  of  Mexico, 
General  Mortgage  four 
per  cent  gold  bonds,  11, 
72 

Native  population  of  Mexico,  26 

Neuvo  Leon,  population  of,  26 


Oaxaca,  population  of,  14,  16 
Obregon,  52,  53,  75,  174,  263 
Occupations  of  Mexicans,  24 

lack  of  accurate  census  of,  24 
Ochre  exported  from  Mexico,  189 
OU: 

exported    from    Mexico,    191, 

206 

status  of,  during  and  after 
Diaz  regime,  206,  257, 
261-264 

Oil  regions  of  Mexico,  effect  of 
development  of,  on  indus- 
try, 180 
Otomi,  19 

Ord,  General,  280-282 
Ord  Order,  281 


Palacio,  Vincente  Riva,  229 
Petroleum,  status  of,  in  Mexico, 

218,  258-260,  262 
Peonage  system  in  Mexico,  115, 

117,  121,  129,  130,  133 
Philippines,  Mexican  trade  rela- 
tions with,  190 
Pious  Funds  dispute,  298 
Polk,  General,  283 
Population  of  Mexico,  10-27 

Americans,  25 

Chinese,  26 

Cubans,  26 

English,  25 

foreigners,  25 

French,  25,  26 

Germans,  25,  26 

Guatemalans,  26 


Population  of  Mexico: 

in  Aguascalientes*,  12 

in  Carupeche,  16 

in  Chiapas,  13,  16 

in  Chihuahua,  26 

in  Coahuila,  13,  26 

in  Guerero,  16 

in  Jalisco,  14 

in  Michoacan,  14,  16 

in  Nuevo  Leon,  26 

in  Oaxaca,  14,  16 

in  Puebla,  13 

in  Sonora,  13,  26 

in  Tarahumaras,  16 

in  Tarascas,  16 

in  Tepehuanas,  16 

in  year  1890,  13 

in  year  1910,  13 

in  Yucatan,   13,   16 

Indian  tribes,  16 

lack  of  accurate  census  of,  11 

literacy  of,  22-24,  27 

Mayas,  11 

mestizo,  17 

Miztecs,  16 

native,  26 

occupations  of,  24 

religion  of,  19-22 

Spanish,  25,  26 

white,  14,  16-18,  26 

Yaquis,  11,  16 

Zapotecs,  11,  16 
Printing,  in  Mexico,  176 
Protestants  in  Mexico,  22 
Public  income  and  expenditure, 
Mexican,  94-103 

See   also    Taxing    System   of 

Mexico. 
Puebla,  population  of,  12 

Quicksilver,  importation  of,  into 
Mexico,  202 

Racial  development  of  Mexico, 
14,  16 


INDEX 


329 


Railroads  in  Mexico,  162-174 
demoralization     of,     171-173, 

174 
establishment  of,  162 

advantages   as   a  result  of, 

169 

attitude  of  United  States  to- 
ward, 163 
effect  of,  on  economic  con- 
dition, 169,  171-173 
effect    of,    on    international 

relations,  169 
Mexican      Central      Railroad, 

168,  243 
Mexican     National     Railroad, 

168,  243 

public  policy,  before  Diaz  re- 
gime, 163-168 
during    Diaz    regime,    163- 

166,  168-171,  174 
reestablishment  of,  173 
Railway  equipment,  importation 

of,  into  Mexico,  202 
Religion,  of  Mexicans,  19-22 
Reyes,  Bernardo,  38 
Romero,    Matias,    estimation    of 
wages  of  day  laborers  in 
1896  by,  136 
Root,  Elihu,  294 
Rubber  exported   from   Mexico, 

210 

Rum,  manufacture  of,  in  Mexico, 
178 


Santa  Ana,  223,  228 

Silk    industry    in    Mexico,    176, 

182 
Silver,  Mexican: 

coining  of,  175 

exports  of,   189,   191,  218 

supply  of,  206,  218 

value  of,  85,  218 
Sisal,    production    and    exporta- 
tion of,  209 
Sonora,  population  of,  13,  26 


Spain,  trade  regulations  of,  for 

Mexico,   187,   190 
Spaniards  in  Mexico,  25,  26 
Spanish   conquest   of   Mexico: 
economic   development   under, 

104,  187,  220 
taxes  during,  95 
Spanish  land  policy,  149 
Spanish  language  in  Mexico,  19 
Stockraising  in  Mexico,   184 
Sugar  in  Mexico,  178,  184 
Sulphur  exported  from  Mexico, 
189 


Taft,  William  Howard,  295 

Tarahumaras,  16 

Tarascas,  16 

Tariff  system: 

before  Diaz  regime,  192 
during  Diaz  regime,  199,  202 

Taxation  system  in  Mexico,  59- 

62,  94-100 
and  concessions,  241 
and  foreign  property,  259-264 
bullion  tax,  97 
consumption  taxes,  59 
during  Diaz  regime,   100 
during  period  following  Span- 
ish rule,  96-98 
during  period  of  Spanish  rule, 

94-97 

federal,  100 
for  land,  102 
license,  100 
lottery  tax,  96,  100 
for  commerce,  59,  96,  198 
internal  (alcabala),  96,  97/ 

99 

for  industry,  59 
for  precious  metals,  84 
for  professions   (patente},  59 
for  property,  59 
paper  tax,  96 
poll  taxes,  60 
predial,  100 


330 


INDEX 


Taxation  system: 

professional  tax,   100 

pulque  tax,  97 

rate  of  levy,  59 

relation  of,  to  coinage  system, 

84 

stamp  taxes,  96,  97,  100 
tobacco  tax,  97 
Tehuantepec  Railway  Loan,  69, 

75 

Tepehuanas,  16 

Textile  manufacturing  in  Mexico : 
in  sixteenth  century,   175-176 
centers  of,  176 
cotton  goods,  176,  177,  178 
cotton  factories,  178 
silk  weaving,   176 
woolen  goods,  176,  178 
Textiles,    importation    of,    into 

Mexico,   199,  203 
Tin,  exportation  of,  189 

importation  of,  202 
Tobacco : 

manufactured  in  Mexico,  179, 

185 

exportation  of,  211 
raw,    exported    from    Mexico, 

210 
Town    government    of    Mexico, 

58-65 

Transportation  facilities  in  Mex- 
ico, 161-174 
cost    of,    before    building    of 

railroads,  162 
Indian  carriers,  162 
railroads,  162-174,  198 
Tuxtepec,  revolution  of,  43 


United  States: 

attitude     of,     recent,    toward 

Mexico,  263,  271-310 
toward    Diaz    regime,    279- 

296 

toward      Latin      American 
countries,  6 


United  States : 

toward     Mexican     railway 

projects,  163,  169,  174 
attitude  of  Mexicans  toward, 

in  railway  project,   163- 

169,  174 

in  seventeenth  century,  221 
capital  of,  invested  in  Mexico, 

242-244,  247 
commercial  relations  of,  with 

Mexico,   6,    193-195 
foreign     policy     of,     toward 

Mexico,  4-9,  72,  279-310 
Mexican  trade  relations  with, 

193,  195,  196,  198,  202, 

203-205,   210-213,  217 
property   of,   Mexican   confis- 
cation  of,   260-264 
"Unoccupied"   land,  in   Mexico, 

149-152 


Vanilla,  exported,  210 
Vegetable  fibers,  exported,  210 
Vegetable    substances,    importa- 
tion of,  into  Mexico,  201 
Vera  Cruz,  189-191 
Villa,  86 

Wine,  imports  of,  from  France, 

to  Mexico,   195 
export  of,  from  Mexico,  191 
Wood    exported    from    Mexico, 

189,   197,  210 
Wool,  exportation  of,   189,   191 

importation  of,  200,  201 
Woolen  manufacturing  in  Mex- 
ico, 176,  178 

Yaquis,  11,  1 6 

Yucatan,  population  of,  13,   16 


3   1970  01953   7031 


